Hi Meena
You cannot exercise exchange traded options in SAP. If in you business this happens you have to close the option with a cash settlement and create a future with the same underlying. The exchange traded options always use an exchange traded future as a base. Therefore you have e.g. a call on corn which is called CH13C700. This means that you have a call option with a strice at 700 cents per bushel on Corn March. This option is normally always cash settled. If not you would get a future CH13 for it. This process is a maunal process as described above.
If you do a close transaction and you have an outgoing initial margin then your flows are not set up correct in customizing. A purchase of an exchange traded option or future should lead to an outgoing flow and a sale to an incoming flow.
Regards
Juerg