Alright, I'll take a shot at this, since I didn't see anyone else chime in yet. I normally post in memes/gifs, so forgive me if anything in unclear.
I think there was some stat somewhere that 70% of options expire worthless. If you take that to consideration, then you have a % probability of winning over 50% (better than a random guess). Taken into a long run approach like a casino, you need to win at least 1 unit gain by 1 unit of risk (i.e. invest $1 to win at least $1) with your 50%+ win.
When you sell a call or a put generally, the upside is limited but you tend to have a higher chance/percent of winning. On the other hand, buying a call or put gives you way more shot at an upside if it goes in your favor but most options as stated before expire worthless.
Okay so enough of that background talk. One spot someone would prefer to sell options as opposed to buying calls or the stock is they want some income generation. If your a fan of places like WSB, Theta Gang is known to do this. They have long term stock positions and sell puts/calls to where they think the price is not going go against them for additional income.
Alright, so this post is getting way too long than my normal ones.
TLDR (with the natural disclaimer of educational purposes and yada-yada-yada)
- Sell puts -> when you want additional income and you know that price is not going to get hit at a certain time
- Buy calls -> when you think the price is going to shoot up in your favor (like a really good earnings call)
- Buying the stock outright -> you believe the stock is going to perform well for some reason but don't know when (or you want to take over it like an activist investor)
FWIW, I like to use options when I have a reason to believe some thesis/catalyst is going to occur within a given time frame. If I am not confident at that time frame, then I would go with a stock. If I am confident at a certain price level and unsure of the timing, then I would go for futures. Also the idea of using other products than the stock is mainly for leverage.