That's a problematically narrow view of the options market. In classic Price Theory, the foundational idea is that "we can't say" what good or profit or service will come from one expenditure over another, BUT WE DON'T NEED TO, as all of that value is captured in the price a willing buyer would buy, or a willing seller would sell. If someone wishes to construct a far-OTM *spread*, can we say whether their purchase or sale of any particular strike is dumb? Smart? Perceptive? Mis-priced?? Not our business. Our job is to assess the risk to OUR OWN capital put up for margin, put in an appropriate order, and have at it. I'm not in the business of selling an over-priced option to dumb buyers; nor do I *think*of* myself as a sucker for buying an over-priced option myself. I'm just a guy accepting a little pawned-off risk from someone else (who feels they have too much).
I probably didn't express myself very well. I was trying to say that the way in which you construct the spread, i.e. double butterfly being eaten by an iron condor, is probably not the way you'll gain alpha. Finding a mispriced option is where the alpha comes from, and while you may need some exotic combination to exploit that, it wasn't the exotic combination in and of itself that got you the alpha. The person I was responding do seemed to believe that there was some combination of options you could construct that would allow you to have your cake and eat it too, which as you and I know just doesn't exist.
I'll even go a step further: I just don't *believe* in alpha. (Or, maybe and more likely, I can't afford to devote the limited *brain*power* necessary to consider *anything* beyond an acute reward/risk ratio. "Damn! It takes me all day! How do [all these myriad other traders] do it?!?!?")
I know traders that don't know option greeks exist that earn over 10k a month. They don't read charts either.
If I had to make money and I had no choice I would take the risk and sell premium leveraged to the hilt... If I was planning on doing it for more then a week or two. I would go back to planning..
All you technical trade nazies can read all the charts and spew off option greeks you want. There are traders out there that can recognize price/volume/time decay a lot quicker than you and taking your money. hahaha
"Where do they teach you to talk like this? In some Panama City "Sailor wanna hump-hump" bar, or is it getaway day and your last shot at his whiskey? Sell crazy someplace else, we're all stocked up here." Jack Nicholson