In the case of exchange listed US securities options, the clearinghouse (OCC) will automatically exercise all cash and physically settled options which are in-the-money by at least USD 0.01 at expiration (e.g., a call option having a strike price of USD 25.00 will be automatically exercised if the stock price is USD 25.01 or more and a put option having a strike price of USD 25.00 will be automatically exercised if the stock price is USD 24.99 or less). In accordance with this process, referred to as exercise by exception, account holders are not required to provide IBKR with instructions to exercise any long options which are in-the-money by at least USD 0.01 at expiration.
Important Note: In certain situations (e.g., underlying stock halt, corporate action), the OCC may elect to remove a particular class of options from the exercise by exception process, thereby requiring the account holder to provide positive notice of their intent to exercise their long option contracts regardless of the extent they may be in-the-money. In these situations, IB will make every effort to provide advance notice to the account holder of their obligation to respond, however, account holders purchasing such options on the last day of trading are not likely to be afforded any notice.