The hypothetical situation is that Bill owns 10 call option contracts with a strike price of $100 and an expiration date of December 15. But let's say Bill went into a coma earlier that year and did not roll the call options. On December 15, say the current price of the stock is $200. But Bill only has $10k of cash in his account. (It's a Charles Schwab brokerage account with margin access of 30% for the stock in question, and all that is in the account is the set of 10 options contracts and $10k in cash.)
If Bill woke up from the coma in January, what would he find in his account?
(My guess: Schwab would automatically exercise the call options and buy a thousand shares of the stock for a total of $100k. At that point, a margin call would be issued, and Schwab would sell around $45k of the stock, leaving the account with $155k worth of the stock and $45k in debt. At that point, Schwab would charge interest on the debt each day until Bill wakes up and sells enough of the stock to get off of margin.)
Also, is there any way to prevent this from happening? People can't time their comas, after all. Is there some way to give account access to another person in case this kind of situation happens? Or even better: Is there a way to tell Schwab to get rid of overnight margin so that they will be forced to liquidate the necessary stock in order to not carry a balance that will rack up interest?