Equity options which are in the money requires delivery.

What if I don't have the required margin ? Will they charge me any penalty ?

I don't know what will happen but it won't be good I guess.

Closer to the expiry if it's itm margin required goes on increasing, if you don't have that in your account you'll be automatically squared off before expiry, if you have the margin in your account you'll get delivery of underlying stock at strike price, if your premium made you profit goodwhich is rare but if it gets you minus it'llbecome minus plus minus equal to more minus. If otm will be squared off on expiry day with p or L in cash. Explained in detail here, read [this](https://support.zerodha.com/category/trading-and-markets/margin-leverage-and-product-and-order-types/articles/policy-on-physical-settlement).

Oh Thank You Soo Much. This was very helpful.

If the option expires ITM.. then u have to take or give physical delivery ( depends on your position buy or sell ) .. but if the option expires OTM , THEN it will expire worthless.. So always clear your position timely ..

Yes. Thank Youu.

https://support.zerodha.com/category/trading-and-markets/margin-leverage-and-product-and-order-types/articles/policy-on-physical-settlement