There's lots of reasons someone might not just convert right...

There's lots of reasons someone might not just convert right away.

• Cashflow - may not have the money to increase their position short term
• Risk - as above may not want further direct exposure pre dill in case of a duster
• Ability to hold options in reserve in case of a discovery for more upside.
• Allows for further derisking by selling heads prior to spud, see above.
• Allows for a holder to have a position in reserve for the long term - I personally see a lot of value in IVZ long term as a Southern African power producer if they hit. Imagine having 14c options up your sleeve if the SP is a $+ dividend paying stock. (this is my plan, keep the options long)

I think I'm a pretty disciplined investor, but sometimes when the money is right there on the screen, in all the excitement that comes with a discovery it can be hard to resist playing around with your positions. Options are easy to quite literally in this case stick them in the bottom draw and pull them out for a boost in your position, especially bonus options you haven't directly paid for.