If it's even slightly in the money at expiration it will be auto exercised. So unless you want to own the stock you need to close it. Also, if you don't have enough funds in your account to buy the 100 shares of stock at the strike you really do need to close it before expiration. I'd find another broker if it's really $15 to transact 1 contract.
Ty for your replies, I understand how it works much much better now I opened an account on optionsxpress, they have a minimum of 14.95 option commision (1.25 per contract but 14.95 minimum) I am from Russia and having hard time finding decent broker who will accept me and be trusted. maybe you have any suggestion for a good broker who accept international client?
Is IB (Interactive Brokers) viable from Russia? -- I don't know, but know people in other countries that use them. They have competitive commissions.
They do, but they will reject if you are Russia. Because you know we are all money laundering terrorists
From my examinations, a lot of brokers charge an assignment fee (10-25$ is not uncommon). However, Interactive Brokers charges 0$. If you purchase a CALL option on XYZ @ 10$ and at expiration time the underlying is trading at 11$ you have two options: 1) Sell the CALL option back on the market (you should get about 1$ minus fees) 2) Let your broker assign you the options (You will pay 10$ instead of the market rate of 11$). IB will charge you a total of 0$ to do this (others could charge you 10-25$) In the event of #2 you then need to sell the stock if you want to get the profit. (Where you will be charged a commission again). Alternatively you could sell a Covered Call on XYZ and should it get exercised they will be assigned (where you pay the assignment fee if applicable). A lot of it boils down to where you want to spend your commission fees. The beauty about IB is that you can take assignment fees out of the equation (as it is 0$) and concentrate more on the core strategy.