Let's say I own a share of a company at $100, and I sell a call option for this company for $5 with a 6 month expiration, and a strike price of $110 (all arbitrary numbers). If the share price rises to $120 and the option is exercised, will my share automatically be sold to the owner of the option? How does this transaction play out?
If I bought the stock and sold the call option through an online broker, would the broker automatically sell my share of the company? Or would the broker automatically try to buy a share at market and then sell it?