Spread positions can have unique expiration risks associated with them. In the case of U.S. securities options, the OCC will automatically exercise option contracts at expiration only if the option is In-the-Money by $0.01 or greater. If both legs of your expiring option spread are In-the-Money, then the long leg will be auto exercised by the OCC and the short may be assigned. It is possible that a short expiring option leg that finishes In-the-Money is lapsed by the owner and you will not be assigned. For non-U.S. options, please refer to the Options Exercise page on our website for information on how the different clearinghouses will handle the exercise.
It is also possible that a short expiring option that finishes Out-of-the-Money is assigned to your account. When that happens, the long option owner has submitted manual exercise instructions and they will additionally pay the difference between the Out-of-the-Money option strike price and the official settlement price. As a result, account holders maintaining a call (put) spread with the short leg having a lower (higher) strike price than the long are subject to delivery risk if the short leg is In-the-Money by $0.01 or greater and the long leg is not, or if the spread's long leg is In-the-Money and auto exercised but the short In-the-Money leg is not assigned. Account holders are ultimately responsible for taking action on such positions and responsible for the risks associated with any unhedged spread leg expiring In-the-Money.
For more information, please visit the IBKR Knowledge Base for information on US Option Expiration and Expiration Related Liquidations.