Given this is an exchange traded option, the exchange contract specification should state exactly what would or could happen.
It doesn't seem to state that out of the money exercise is prohibited, so perhaps you can do it and pay the loss ...
Yes it is possible to do what you are asking. See following two transaction types at Fidelity:
Initiate an Exercise-and-Sell-to-Cover Transaction
Exercise your stock options to buy shares of your company stock, then
sell just enough of the company shares (at the same time) to cover the
Per CBOE stats, only about 7% of options are exercised.
There are several reasons why an option might be exercised early:
The owner doesn't know any better and throws away remaining time premium, not realizing that he'd salvage that time premium by selling the option. This is rare.
The time premium is low and exit costs (commissions and B/A spread) are ...