I am a bit confused about the impact of implied volatility on options, SPY options especially. I know that option's price decays with time and that is positively correlated with implied volatility but here some questions:
Question #1: Because implied volatility seems to be highly correlated with actual volatility (i.e. VXX) in the market (at least over a timescale of weeks) and because VXX is negatively correlated with SPY, buying a short-term (i.e. 10-day) OTM call on SPY seems to be a loosing bet most of the time: If SPY goes up, your call might go up in price because it is closer to the striking price but that increase might be eliminated by the decrease in implied volatility. So, what I am missing here?
Question #2: How should I understand the implied volatility of VXX itself? Is it just correlated with VXX or a completely different beast? (I could not find any historical data on VXX's implied volatility.)
Disclaimer: I have been learning about options only over the last 2 weeks so, I apologize if these questions look dumb.