I am a newbie just got an internet trading account recently. I've got some questions about what to do on expiration. From my understanding, I cannot close out options on expiration to realize the profit (or can I?). I can either exercise or allow it to expire worthless.
Suppose I have an in the money put option on expiration. Do I actually need to buy the underlying share from the stock market and sell it to the writer straight away to obtain the profit? If so, it's very incovenient since I have to have the money to buy the undrlying share to start with. Similarly for in the money call option on expiration. Do I actually have to buy the share from the writer then sell it to the market straight away??