I wouldn't necessarily agree that you have to pick the direction. In a market going sideways on decreasing volitility (such as the current market), you can make a packet writing out of the money calls and puts. I would suggest you only buy in the money ETO's if you have a defined direction.
A week of so ago you could get $1.50 writing RIO $28 Sept Puts that were never in the money and highly unlikely to go into the money. (You can sell them Today for 40c).
The advantage of Selling Puts and Calls is that you win in a flat market as well. If you Buy you only win when you pick the direction.
