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 strike price exceeds the final settlement price, multiplied by the contract multiplier and number of contracts you hold.
If the option is physically settled, you will be obligated to deliver 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 be delivered from your account to the extent that you hold a long position. If you do not have an existing long position of sufficient quantity to satisfy your delivery obligation, your account will carry a short position. Your ability to maintain that short position depends upon whether you have a margin account and whether IBKR is able to borrow shares at settlement. If not, your position is subject to forced closure.
In addition, 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.