Stock options and cash settlement


When you exercise the ITM option, the shares will delivered into your account. If you don’t have enough money to buy the shares, your brokerage should front you the margin. You only get cash when you sell the option or sell the shares for a profit.


For stock options it is most common with delivery of the underlying stock while cash settlement is most common for options with an index as underlying.


You don't exercise it. Unless, of course, your goal was to buy 100 shares of Apple.

When a long call is in the money, there will be value in excess of the in-the-money-ness, even a small amount of time value up until expiration. Unless the stock is very thinly traded, and the market maker for the options really doesn't want to grab a few dollars, most expiring options are sold, not exercised.

Keep in mind, the markets are closed over the weekend, but world events go on. If you let the option exercise upon expiration, you have a weekend that can set you up for a market drop on Monday, pulling the stock down, possibly below the exercise price.

To answer your specific question - the exercise of a stock option results in a long stock position (or short in case you bought a put.