Because it is a leveraged product.
The extra premium is the time and volatility premium.
If LRV moves another 50% up from 0.42 to 0.63;
LRVO will move up (a minimum of) .21 from 0.19 to 0.40. This is a 110% increase on your investment
However is LRV does not move at all and stays at 0.42 until option expiry. The price of those options will fall from 0.19 to 0.12
Ann: Tenement Application Lodged in Western Australia, page-81
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