options

Hi guys.

Sorry for the basic question but I cant get my head around why anyone would convert their options instead of just covering them in the market?

For example, Say I buy my GGPO now and the heads get to 8.6cents. Shouldnt the options only be worth the difference between the exercise price and the price of the heads? How do the options ever manage to trade at a premium to the heads?

Does anyone realistically think the heads can actually get to 8cents? That would require a market cap of approx 100 million. I dont see that as attainable personally in this short time frame. Which makes me nervous about holding the options.

Thanks for any insight anyone can lend.