I've never found a useful method for establishing a directional view. Tried FA, trend following, lots of TA stuff... the only thing I came away with is a conviction that everything I've seen in that regard is voodoo taught by charlatans who use complex excuses for why it fails, and trumpet their "successes" when it doesn't. If you have any suggestions, that would be terrific.
cannot go into details without (legitimately) violating an NDA other than to state that there is inherent predictive value in studying the shape of the wing and local-vol curvature.
Verb. sap., as they used to say in the old days - and again, greatly appreciated. I've got just enough of a clue at this point for that hint to be useful, and will definitely focus my efforts in that direction. Still have to figure out the nuts and bolts of building a vol surface model - a decent quality data source, mostly - but I'll get there.
I believe trading strategies are just a byproduct of a process machine where you already have an absolute view on the market and a risk plan; options will come into play if they give a better risk/reward rather then using the underlying. Also, one could debate if most of the option strategies are actually useful to serve the retail trader mandate. I could see why a strip/strap straddle might serve well a trader ("directionally, from the outset"). Yet, what's the actual use of a butterfly?
For me, until this year, a simple up/down bet was far more profitable than the combinations I tried. Maybe it is just gambling and that was why I kept thinking it was luck rather than skill. A side comment, my tools are too primitive to analyze fly wing shape and volatility curvature.
+100 on this. The view and the plan are the most important by far; the technique used to trade that plan and view must be chosen to suit them, not the other way around. One could. But not very well - in large part, due to your first point. How can you take advantage of your view on the market if you don't have the tools in your toolbox? Unless your views are always binary or trivially simple, you will lack the means to execute on them effectively. The ability to take advantage of certain views on the market.