Because, as I said, the value of derivatives is unrealizable in an existential market crash. The paper position is irrelevant when the market cannot cover them. 2008 proved this, and only the extremity of the 5X inflation of the money supply - merely a temporal reprieve - covered them.
Will we undertake a 50X inflation next? It becomes too obvious a caricature of actual markets to enable acceptance at some point. The monetary flows into cryptos indicate to me we have passed that point.
When the bubbles pop this time, what is left of the phantom fiat will be poured into a real solution, I think, rather than more smoke and mirrors.
YMMV
you can still choose to exercise your derivatives or simply let it expire.
Derivatives that were employed to hedge the risk of the bundled mortgages were not exercisable, despite them being theoretically very valuable when the mortgages defaulted.
They couldn't be, because there was no money to pay them.
It wasn't a matter of choice.