Truly Understanding Options Now Deeper Lessons. Update.

Everything finally clicked on a deeper level, these are the best lessons I've learned necessary to understand to progress as an options trader.

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Options Are For Directional Bets:

Stop overthinking option structures and starting thinking options are just various ways of betting on direction, receiving leverage at the cost of timing where the direction will go. So focusing on direction should be the most important factor. Having conviction where price will go and in what timeframe.

Using neutral structures by nature opposes the nature of options. It's about taking directional bets.

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Stay AWAY From Earning's:

Earning's actually are not a good environment because the market makes you pay more for the elevated chance of a big directional move, pre-earning's potential big move becomes more costly as gets closer to earning's in form of IV expansion which is the cost/kicker. Earning's has IV crush which is the price to pay to receive the elevated chance of big directional move in reaction to the earning's. Everything's almost priced-in basically, you're paying a lot more during these events for the chance it's not.

Most professional option traders avoid earning's, they don't want to pay additional costs for the elevated possibility of a big directional move. They want to capture directional moves outside of the binary event. These events cost much more to play as market prices in any potential move, probably even over pricing which is why most lose on earning's.

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What The Professionals Trade:

If we're betting on direction, why would we go watch the movies on the night's when they charge extra? Could've watched it matinee aka betting outside of earning's. For example, NVDA had good earning's report, but Sept. is worst month of the year. So I can open a diagonal from now till next earning's in Nov., closing before that earning's to avoid paying for that IV expansion/crsuh, aka the elevated possibility of directional move which plausibly could come during that binary event but with substantial cost I want to avoid! So I can open $130c and sell $140c diagonal with 3 months on the clock, making sure to avoid assignment while price works its way up. There's no elevated costs for protentional directional move, so I actually want to dodge earning's always. Am just paying for more time to get it right while still utilizing leverage and avoiding binary events. Focus on direction, focus on taking directional bets when have high conviction, but when the market isn't charging you a kicker to play the possibility of elevated potential directional moves cause they don't price fairly!

So I would open something like NVDA $130/$133 (9/13-11/22) closing right before next earning's like two weeks before, and since think Sept could sell off open a put debt spread around $105/$102 with a month on the clock to play the downside Sept. thesis. If price does drop, close the put debt spread and open a new NVDA diagonal something like $112/$115 now. So it's just like trading shares now but more technicality needed to safely utilize the leverage.