Hello Hedgehog..
dont know if its the answer you're looking for...but as a reformed index options trader from way back... I really dont think any index option trader ever has the intention of excercising any of the options....if the option goes "in" the money...then the option itself is worth more money.... and therefore...just the option gets sold at the end... you mentioned that if an option is allowed to expire....then what happens....?? all options at or out of the money expire worthless...therefore..no reason for any excercise...Jerry...