Hi, I'm new to trading options (I have not attempted it yet). I have a very basic question but cannot find the answer anywhere so I figured I'd come to you guys. My broker told me that all options in-the-money by $0.05 or more are automatically exercised, is this something that all brokers do? Is there a chance that in-the-money options will not be exercised because the option owner paid too much of a premium for it? Also I would assume that virtually no options that are out of the money are exercised. Correct? I am planning to write covered calls and possibly naked calls on a stock that I want (long term growth and dividends) but that I think is going to be pretty flat for the next few months.