What Is the Procedure for a “Do Nothing” Decision When a Short-Dated Option Expires?

A "Do Nothing" decision means allowing the option to expire naturally. If the option is out-of-the-money (OTM), it expires worthless, and the premium paid is lost, but no further action is required.

If the option is in-the-money (ITM) and cash-settled, the holder automatically receives the cash difference between the strike and the settlement price. If it is physically settled, the holder is automatically assigned the underlying asset or obligation, which must be managed.