Settlement of Calendar Spreads - How Does this Work?

Hypothetical: let's say it's Jan 17, 2015 and AAPL is at 100. My portfolio contains:

Long 1 Jan 23, 2017 Call Option for AAPL at 60 Short 1 Jan 17, 2015 Call Option for AAPL at 90 20,000 USD cash

How does settlement work? The in-the-money option will be assigned. The portfolio contains no AAPL stock to be called away. Is my 2017 option exercised or am I cashed into AAPL stock at the closing market rate and then it is called away? (My understanding is the latter)

What happens if AAPL closes at 300? Then I owe 210/share on the contract and the only way to square with my broker is to exercise the long call. Will my broker do this automatically? Will they be upset with me or is this routine? Am I guaranteed the 5:30 price in this circumstance?

Does this process vary from broker to broker or is it the same everywhere?

Trying to understand all the risks of leveraging up around exchange mechanics.

Submitted January 14, 2015 at 04:40PM by johnshedletsky http://ift.tt/14B6JGz