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Exercising an option without paying for the underlying
This is dependent on the broker according to The Options Industry Council.  Your broker will specify what they would do upon expiry (or hours before last trade) if you did not indicate your preference. Most likely they will conduct a probabilistic simulation to see whether exercising the contracts may result in margin deficit even after selling the delivered shares under extreme circumstances. In most cases, brokers tend to liquidate the option for you (sell to close) before expiry.  I've seen people complain about certain brokers forcing liquidation at terrible bid-ask spreads even though the options are still days to expiry. It is better for you to close the position on your own beforehand. The best brokers would allow margin deficit and let you deposit the required amount of money afterward.  Please consult your broker's materials. If you can't find them, use live chat or email tickets.