Options do not have to be exercised in order to realize any potential gains. In fact you actually lose money by exercising them, since you paid a time premium to buy them which is lost if you exercise the options. They can also be traded like any other security or they can be held until expiration. If they are held until expiration, the system will settle the contracts in cash.
If you do wish to exercise your options, you can click the “Exercise” button on your Open Positions page next to the option you wish to exercise.
4-04 Meet Warren Buffet