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Agreed, also to add that market conditions during trade entry are very important to limit risk.. We've been in a low vol environment for the vast majority of the time over the last few years, and our hedged straddles and calendars are vega positive trades. By entering when the vol is low, the risk of significant decline due to further vol drop is less. Now that we've seen some extended periods of elevated market vol, we have to look at vega negative trades like the SPX butterflies and the current IBM BWB trade - these trades will benefit from IV decline but by using OTM puts they can still make some gains on downward price movement if vol stays elevated. We can still do a couple of straddles and calendars that can work if vol stays elevated or increases - but they are riskier to open when vol is elevated, so we don't have a many of them open.

One of reasons steadoptions is so successful is not so much that our strategies are resilient to volatility... they actually BENEFIT from vol (there is a big difference). nassim Taleb would refer to this as being “anti fragile.” short vol can work, especially if implemented wisely like we do here from time to time. Short vol strategies in general though are fragile in that they are extremely susceptible to unexpected volatility surges or black swan type events. SO foundation is based on trades that are the paradigm of anti fragility

You will profit and keep the the premium you have received as long as the stock price is above $55 when the option expires.

is it consider naked if its cash secured? seems like I can't read

you can write naked options in your 401k?? edit: missed cash part

You left out the "Iron" fly, which is a straddle/strangle, using both puts and calls so, by definition, the outer strikes will always be less than the middle strikes. (OTM calls above and puts below). That was sort of the go to, standard fly that was used during my years on the floor. Also, whether buying or selling a fly was the most profitable choice at any given time had less to do with "theory" and everything to do with "pricing". Neither buying, nor selling, a fly is a "better" strategy than the other. It is all about the pricing of that fly . In all of my years on the floor, the single most profitable trade, for everyone, at that point in time, was selling ATM fly's for 30% of the distance between strikes. This was in crude oil mostly,( but pretty much in everything at that time), which at that time was moving through 2-3 strikes, several times a day, everyday. We would buy the ATM straddle, and sell the next higher call, and lower put, and pay 30% debit of the distance between strikes. For example, with crude at $70, we would buy the $70 straddle, and sell the $69 put, and $71 call, for a debit of .30 for a $1.00 wide fly. Unlike stock options, which are x100 (shares), crude options are x1000 (barrels), so .30 = $300 (not $30). As the price moved away from ATM ($70), the fly would immediately gain in value, and when it reached the next strike, would be priced at .60-.70 ( 100%+ gain). Crude would travel past 2-3 strikes, back and forth several times a day. So, buying the middle, and selling the wings "can" be the most profitable strategy there is IF the "pricing" favors it. Our rule of thumb, which I would still use today, is to be able to sell a fly for 30% of the distance between strikes. Given my history with this, I am always looking for this opportunity, which pretty much never exists in stocks, but does in various commodities from time to time. This was a trade, like any other trade in history, that was discovered by a few people, and worked 100% of the time. Then, as more and more people became aware of it, and more people used it, the pricing obviously would change, ultimately pricing itself out of having an edge. But, because there was no retail access to this at that time, or personal computer trading platforms, this opportunity lasted 2-3 years before becoming too crowded and pricing itself out of profitability. So no strategy is "better" than another ...what makes one the best opportunity is the "pricing" of that strategy. And if a particular position becomes too popular, and therefore too "crowded", by definition the reverse has to be the best approach, because of the imbalance of liquidity. Prices follow the "path of least resistance", and if most participants have a position on the same way, they will eventually need someone to be there to take the other side when they try to exit the trade. This is why , more often than not, movement occurs that does not make "logical" sense. There is tremendous opportunity in being "contrarian" when used properly, for these reasons. These trade cycles are as old as the markets themselves... there is nothing new here, just the way it plays itself out in different situations, during different times.

@bycfly The reason option sellers make money over an extended period of time is that implied volatility exceeds historical volatility. Means the markets anticipate a higher move than it will actually occur. This alone - but not only - gives option sellers an edge in the market. I'd recommend you watch the video 'What's Our "Edge" Trading Options?' from optionalpha. At around minute 30, he shows the comparison between implied and historical volatility. Watch the complete video for a complete picture.