Yes, it's the time value of the options. Basically, the longer they have to run, the more chance that the stock price will reach that level, and so the higher the value of the option. (Yes, there's a greek letter for this. It's all greek to me.)
The time you should or shouldn't hold them is entirely subjective. The perfect market theory says that it shouldn't matter on average. I tend, myself, to hold options too long. These are well into the money, and I think (again, myself) that there will be analyst upgrades next week and a good possibility that they will be worth more, a lot more than the decaying time value. I'd hold onto them. (As I am with my own Aug 10 $307.5's, purchased at $16.75 some time ago. Having said that, I sold exactly half of them yesterday, at $33.50, in a pre-programmed trade.)