I look at it this way - if you've decided to go long gammas and short thetas, then you've determined that options are underpriced, or true volatility is about to rise, or some combination thereof.
If your expectations come true, then a big part of your profits will come from rising IV. I'd say that probably the BIGGEST part of your profits will come from a rise in IV. So why on earth would you want to have the massive sea-anchor of short back-month options dragging down your profits from rising IV just as things are going your way?
On those rare occasions when IV is historically low and complacency excessively high, I love to buy naked premium. The more time remaining, the better - the more vegas and the less thetas, which is just what I want. Panic follows complacency like night follows day so when something happens and panic ensues - as it inevitably will - it's wonderful. I can't think of a nicer feeling than being long premium when the s*** hits the fan. But what a bummer it would be if I was short the high-vega options (back month) just as IV began soaring.
If you want to buy premium and sell premium to help pay for it - in anticipation of future increased volatility - you'd be much better off buying back month premium and selling front month premium, buying more back month options than you sell front month options. That way you stay very long vegas while remaining neutral thetas, which gives you staying power. Or if the skew is reasonably flat you could consider buying strangles and selling straddles.
If your expectations come true, then a big part of your profits will come from rising IV. I'd say that probably the BIGGEST part of your profits will come from a rise in IV. So why on earth would you want to have the massive sea-anchor of short back-month options dragging down your profits from rising IV just as things are going your way?
On those rare occasions when IV is historically low and complacency excessively high, I love to buy naked premium. The more time remaining, the better - the more vegas and the less thetas, which is just what I want. Panic follows complacency like night follows day so when something happens and panic ensues - as it inevitably will - it's wonderful. I can't think of a nicer feeling than being long premium when the s*** hits the fan. But what a bummer it would be if I was short the high-vega options (back month) just as IV began soaring.
If you want to buy premium and sell premium to help pay for it - in anticipation of future increased volatility - you'd be much better off buying back month premium and selling front month premium, buying more back month options than you sell front month options. That way you stay very long vegas while remaining neutral thetas, which gives you staying power. Or if the skew is reasonably flat you could consider buying strangles and selling straddles.
