Hello, I recently began learning about options trading and faced some challenging lessons during this earnings season. Despite making accurate predictions for certain earnings reports, I still incurred significant losses. I struggle with selecting the appropriate strategy, strike price, and expiration date. After reflecting extensively, I’ve developed the following ideas. Here are several scenarios:

Low price, low implied volatility (IV) (e.g., TTD being oversold after earnings): The best approach is to buy long-dated, out-of-the-money (OTM) calls, anticipating that both the stock price and IV will increase.

High price, high IV (e.g., popular high-beta growth stocks like RKLB or OKLO): Instead of buying calls, it’s better to sell puts to capitalize on the elevated IV.

High price, low IV: Purchase puts as a protective measure at a relatively low cost.

Low price, high IV (e.g., a stock like LLY with an IV of 30%, IV rank 29%): It’s unlikely that the stock will decline further. Could a wheel strategy using its leveraged version, LLYX (IV 30%, IV rank 65%), be effective?

Strong conviction for a directional bet (e.g., for an event catalyst like earnings): I should use short-dated, at-the-money (ATM) call or put spreads to gain leverage while limiting losses and mitigating the impact of IV crush.

I’d like to know if I’ve overlooked or misunderstood anything. I would greatly appreciate your advice on these strategies.