Why would you want to exercise an out of the money put option in the first place?
The stock is at $9.01 while the put options allows you to sell at $9.00, which is $0.01 lesser. Why would you want to do that? Even if you what you want to do is to sell the stocks, you could just allow the put options to expire worthless and sell the stock at $9.01, see?
Yes, you automatically sell the stock when you exercise those put options.
If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities.
Interest you earn in a savings account is taxed as ordinary income. This means it is taxed the same as your wages.
Dividends from a money market mutual fund are considered dividends, not interest. Dividends get a preferential tax treatment. The maximum rate for dividends is 15%.
So, if you are in the 15% tax bracket or less, there is little or no difference. If you are in a bracket higher than 15%, you will pay less income tax by putting your money into a money market mutual fund.