Exercizing your call option - is there a broker that can do it for you?

Question

Here is my question: let's say I buy $1,000 worth of call options. Before expiration, the stock price raises well above the strike price. I now want to take advantage of the gain and exercize the option. I want to buy at the strike and immediately sell it. The problem is, I don't exactly have enough funds to do that. Is it common for brokers to lend you the money just for a split second? They should see that you will give it right back to them in a second, it could even be automated. I asked Scottrade about this though and they said they didn't do this. So my question is, are there any brokers who do? How common is it? It seems like something they all should offer.

Answer 1

(1) There is no need to exercise your options to realize your profits. You can simply sell the call options without ever exercising them.

(2) Assuming they are American style options, which they will be if they are traded on an American exchange and the underlying is a stock, you could exercise some one day, sell the stock the next day and exercise more the next day, reducing the amount you need to have in your account. However, I do not recommend this approach.

I do not know of any brokerages that would allow you to exceed your margin limit to exercise calls since there is no need to do so.