[...] I work in an an industry with a lot of bright, ultra wealthy people. I see them take risk consistently and build massive, generational wealth from it. Not only in our primary business but just for fun in side bets. I recently watched a couple guys place a $40,000 bet on the Brexit and make more than I would need to FIRE in 24 hours. Yes they could have just as easily lost $40K but they would just do it again and again, they do it all the time. They win some they loose some but they make sure the bets are weighted in their favor and the winners pay for a LOT of losers. [...]
I suspect there's heavy confirmation and selection bias that goes into this statement.
The confirmation bias is your desire to want this to be true, so you see/remember the examples that support your hypothesis, but not the examples that don't.
The selection bias is on the part of the people who made the bet - people who win bets are usually vocal about it - people who lose bets tend to be quiet about it. This means that an outsider sees much more of the results of wins vs. losses.
In order to win when you're gambling, you need an "edge". In general, in gambling games (the options market qualifies) with large participation, the edges people have are not large.
If they bet the way you say ("the wins pay for a LOT of losses") they're betting on long shots. I can virtually guarantee that even though the wins pay for a lot of losses, if they "do this all the time", the have more losses than the wins pay for.
Compulsive gamblers think this way - the celebrations you probably witnessed are what keep them going. They discount the value of the losses, and don't track their long-term ROI because they live for the high they get from a big win. It's particularly wins like the one you describe that they thrive on - the long shot that shows they got something right that "everyone else" got wrong.
Slow and steady is the way to go but it's not the only way. Plenty of people take risk and are rewarded handsomely for it.
Yes - it's better to be lucky than to be smart or good - however, casinos make money on this kind of thinking. If you want to get lucky, make a small number of bets - if you lose them, stop. If you win, stop.
The casinos know few people will do that - they just go back over, and over, and over again until they lose. Eventually all of the money will end up with the house.
My suggestion is - set aside some play money if you feel tempted to act on your urges. Promise yourself you'll never spend any money outside of this account on your gambling. See how you do. If you get lucky a few times, you may be able to make your dreams come true.
If you're unlucky - you'll still have the "slow and steady" strategy to fall back on.
BTW: Asking for and following somebody's opinion on a public forum of when to place a bet in a "partial information" game like options sounds like an inherently flawed strategy. You need to get information that no one else has to build your "edge."