Dear 1prometheus, You definitely exhibit a keen understanding. There is really no true "edge" that is implicit in options trading for the typical retail investor. I like how you realize that being positive theta is not a true edge nor does it lead to a positive economic expectation in of itself. For being long theta comes at the expense of a very real and very nasty gamma exposure that can and will blow up in your face. Selling cheap gamma can be a very dangerous strategy, and I have endured many painful trades doing this very strategy. Also, trading for cheap credits can reveal how a sudden sharp rise in volatility can completely devastate a series of small winners. For example, receiving credits via a put spread does have its synthetic equivalent (put/call parity). So how should one trade? It often is also related to your personality and style of trading. As you correctly stated, you will have a higher % number of winners selling cheap gamma, but your losers will be much more painful.
That is some good stuff! A small vacation for two to Vegas maybe? I wonder what he will do with the submitted ideas. If they're so good why would the person who thought of them give them away?