I'd go with option 1 but I'd take 2 if I could get an extremely good deal.
I've been working on what I call the "bargain bin 7070" meaning no coin in there is over the price listed on the highest bargain bin at my local coin shop (so, nothing over $40 bucks). As such, I'm quickly approaching your conundrum myself. What to do about those
Trade dollars, etc.?
I can tell you one thing I learned: hunting for coins out in the wild has made me learn a thing or two really quick and has actually increased my love of collecting more than simply bagging and tagging slabbed coins. And this site has been uber-helpful in my education.
But the key here, I think, is cherrypicking. Know the ballpark price and know the coin (I study the photograde to give myself a burned in mental image of what I'm after at the moment and average a couple of price guides for the ballparks) and cherrypick like blazes.
Also, I'd say, is look everywhere for coins.
ebay, online coin shops, brick and mortar coin shops, etc. etc. etc. As has been my experience there's always an odd coin out there somewhere that is just waiting for someone to buy it really cheaply.