They are behind yes, but it's a sunk cost. For example,...

They are behind yes, but it's a sunk cost. For example, hypothetical scenario - you bought IBXO at 10c. IBX price is now 5.5c (example). You now have a choice - a) exercise for 5c or b) let your options expire worthless.

If you choose b) you lose your entire investment. If you choose a), you can at least recoup 5.5c - 5c = 0.5c per share of losses. Therefore it's easy to see that as an option holder you will always exercise the option if the strike price > share price at expiry, even if you are at a loss. The only scenario where you wouldn't exercise is if share price < strike price.