In the case of U.S. securities options, the OCC will automatically exercise any option that is in-the-money by at least $0.01 unless you provide contrary exercise instructions. For non-U.S. options, please refer to the Options Exercise page of our website for information on how the different clearinghouses will handle the exercise.
If the option is cash settled, your cash balance will be credited by the amount by which the final settlement price exceeds the strike price, multiplied by the contract multiplier and number of contracts you hold.
If the option is physically settled, you will be obligated to buy the shares in exchange for a cash payment equal to the strike price multiplied by the contract multiplier and number of contracts you hold. Shares will reduce or close an existing position on your account to the extent that you hold a short position. If you do not have an existing short position of sufficient quantity to satisfy your purchase obligation, your account will carry a long position.
IBKR reserves the right to prohibit the exercise of options if the effect of the exercise would be to place the account in margin deficit. See the Interactive Brokers Knowledge Base for additional details.