I have a theoretical question that involves option call buying. Suppose that I only have $1000 in my IRA brokerage account and decide to buy 100 calls of stock with strike price of $100 on Friday option expiration day at $0.10. At the end of the day the underlying security trades at $100.10 and I fail to close out the option call position. On Monday morning I would find that my account has a market value of $100,000 as the brokerage firm has exercised my calls and assigned the stock to me and also put my IRA account in $100,000 margin. I had posed this question to my broker because I had failed to excercise bunch of calls on Friday and found out that my account today on Monday has the underlying security in my account that exceeds the market value of my purchasing power. When I called my broker, he told me that I would be subject to cash margin call and that all exercised stocks in my account would be sold. I told him great as you had just allowed me to speculate for one day with theoretical margin of more than a 100:1 in an IRA account. I had also asked him, what would you do when the underlying stock had opened down $10 leaving a shortfall of $10,000 in my IRA account that had original market value of $1000. "Thats how options work he replied." I asked why didn't you close out those options for me, he said that he couldn't do that?