Whoever buys the options needs to exercise them or they lose money. Market makers will buy options at expiration and exercise them. If someone truly did not want to benefit from their options they would keep them and tell their broker not to exercise them, because most brokers will exercise in the money options at close.
Puts are also automatically exercised. Your broker buys the stock for you and sells it to fulfill the contract. If you don’t have enough maintenance margin in the account, the broker may close your other position to cover it, or require you to deposit funds or charge you some sort of fee. Options and futures that close in the money are always automatically exercised, search it up. That’s one reason you never want to hold future to expiration, you will be required to take delivery of the oil or whatever the commodity is. Well some futures are cash settled. Oil is not.
Whoever buys the options needs to exercise them or they lose money. Market makers will buy options at expiration and exercise them. If someone truly did not want to benefit from their options they would keep them and tell their broker not to exercise them, because most brokers will exercise in the money options at close.
You don’t automatically exercise out options though. That would mean the buyer would be short the stock he doesn’t own from buying a put.
Puts are also automatically exercised. Your broker buys the stock for you and sells it to fulfill the contract. If you don’t have enough maintenance margin in the account, the broker may close your other position to cover it, or require you to deposit funds or charge you some sort of fee. Options and futures that close in the money are always automatically exercised, search it up. That’s one reason you never want to hold future to expiration, you will be required to take delivery of the oil or whatever the commodity is. Well some futures are cash settled. Oil is not.