Trades,
I had to laugh when you posted: "Can't have the market rally much here either as while that will trash the majority of put buyers a big rally would allow many call buyers to make money. Sideways to down will trash the majority of put AND call buyers. And that's just the way it has to be."
As a PUT buyer I can say it has not been that profitable, trading PUTs. I know you are correct, most PUT buyers and CALLs) hold "to expiration"..Why? When it is better during the last 45days cash in any value and roll forward. "If" you are trading fundamentals. Before the days of options we were required to trade on margin., I saw many traders lose money, me included, and then the market within a few days turn in their direction. Chasing the market would cost more in comminsions than like today buy options. Options have helped me ride out some wide swinging markets.
I have speculated the market is being supported for political reasons more than stock values. If the market is able to rally enough the funds will step in and carry the market higher. As you know funds trade technical, and most will tell you they buy as the market makes new highs. Then sit on the sidelines during declines.
For me, the stock market is going to be one of the greatest shorts of a life time. Still timing will be critical. PUTs for me wil be a tool of choice. Like the funds, only difference I do not buy PUTRs on new lows.. I buy PUTs as thee market runs out of steam.... noted by price movement and volume. Also I have a group of stocks that reveal a turn quicker than the other indexs.
It has been a good year and I hope all is well with you.