Why Might an Investor Choose Not to Exercise an ITM Option before Expiration?

An investor might choose not to exercise an 'in-the-money' (ITM) option before expiration because early exercise means forfeiting the remaining extrinsic (time) value of the option. The option's premium includes this time value, which the investor paid for.

By selling the option instead of exercising it, the investor can capture both the intrinsic value and the remaining extrinsic value, often resulting in a greater total profit than early exercise would yield. This is especially true for European-style options, which cannot be exercised early.