If I’m long, in the money put options at expiration, and don’t exercise them, do I then have the option of being short the stock itself, or will I just be automatically exercised at the price of the put option at the close of trading that day ?
If you do not exercise the Option at expiry then that is the end of it.
If you bought the Put Option you have the right but not the obligation to sell your stock (or whatever underlies it) to the other party at the pre-determined price. They have to buy it at that price if you exercise the Option. Either way you are out the premium you paid to buy the Put Option.
Obviously if the stock price is lower than the strike price + premium you would (probably) want to exercise the Option (although there could be reasons you might not want to).
Of course the reverse is true. If you sold the Put Option then the buyer has the option to exercise. If they do then you have to buy the equity at the agreed price whether you like it or not.
The vast majority of Options expire without being exercised and nothing happens except the people who sold the Option keep the money from the premium the buyers paid for the Option.
I don’t believe this is true – at least for listed options cleared through the OCC (Options Clearing Corporation). They have a policy that any option which is in-the-money by 0.01 (I’m not sure if that’s the total value of the option or if it means the per share difference) will be “exercised by exception.” You can arrange for this not to happen by contacting your broker.
If you don’t have enough cash in your account to pay the exercise price on a call, you can sell the option at close giving you a cash payoff equal to the closing price on the call (which should be exactly the in-the-money-amount) or you can tell your broker to sell the shares. Since both transactions will be completed in 3 days, it will have the same effect (though I suspect the latter is more costly to do).
I assume you can instruct your broker to short the stock if you have a put, but my guess is that would not be done automatically.