when an atm option expires it normally has no intrinsic value and is not automatically exercised since the option s strike price is equal to the underlying asset s value often traders holding atm options sell them before expiration to capture any remaining extrinsic value or time premium however given that the time value diminishes as the option approaches its expiration date the opportunity to do so is quite limited 
otm options have a strike price not favorable given the current market price of the underlying asset hence they usually expire worthless unlike itm options otm options will not be automatically exercised holders of these options often let them expire though they could try to sell them to recoup some of the initial premium paid which is likely to be minimal as the expiration date approaches 