I agree! For a beginner it will really simplify and standardize the learning process. Once you grasp more (maybe after a few months) then look at ITM options because they do have there place with certain strategies. Its better to brake the learning process up into chunks and this is a good way to do it.
Your predilection for stating absolutes is getting away from you (again). I have a method wherein I can predict with ~ 70% accuracy when certain stocks are about to rise. The problem is, my trigger doesn't always nail the bottom. Sometimes I'll get a "buy" signal and the underlying will continue to drift down for a day or two. (To be sure, sometimes it CONTINUES to drift down -- that's the 30% failure rate.) I purchase ITM call debit spreads which (a) affords me some downside protection and (b) lets me close out the short leg for a profit should the underlying continue to drift down a bit but appear to be turning around. If it appears to NOT be turning around, I close the trade. There is absolutely a discretionary component to these trades, but they work for me, and frequently I pocket a little money on that extended sag because I am short a call.
Interesting strategy but why not sell OTM put credit spread with the credit being equal to your debit spreads width minus your debit. It would appear that you can accomplish the exact same position. The advantage of using the OTM's is that if you are right you can let them expires worthless and save on the exit commissions. Also when you close that ITM spread if its a profitable situation and you wait until expiration for max profit you usually have to give up a penny or two to the market maker so you will probably not sell it for the total width. For example if its $1.00 wide you will only be able to get $.99 for it.
Well, for one thing my broker will simply wash the 2 legs at a discounted rate if they're both ITM at expiry. Obviously I have to be careful and make sure the underlying isn't too close to the short leg as I generally don't want to exercise the long call without having the short call to offset. Furthermore, I don't usually go very deep ITM at inception -- meaning the short delta is typically close to 50. It's pretty common to get a touch, and I have to judge whether or not to close or let it ride. If the short leg is a put and the underlying is drifting down, I can't close it out if I am still bullish -- (1) I locked in a loss on that leg and (2) I'm now long a put, which is not where I want to be. It's certainly not a bulletproof scheme or anything. It's the way I'm comfortable trading it.
You can create the exact same position with either ITM or OTM spreads. So why choose OTM? The advantage of using the OTM's is that if you are right you can let them expires worthless and save on the exit commissions. Also when you close that ITM spread if its a profitable situation and you wait until expiration for max profit you usually have to give up a penny or two to the market maker so you will probably not sell it for the total width. For example if its $1.00 wide you will only be able to get $.99 for it.
As I have mentioned before options is a TOP-DOWN process. You pick an underlying first and then base your option trade on how you think the underlying will trade in the future. To fully answer your question I will need to know the underlying and projected move - I then will come up with the most suitable option trade, which most likely will be OTM. I myself go after bullish trades on AAPL, MSFT, GOOGL, AMZN, PCLN, FB, TSLA and QQQ and buy OTM options.
Are these vertical spreads you're going in on? From what I've learned so far, the folk at tastytrade, warn new people like myself, to be cautious of buying straight OTM calls/puts as they usually expire worthless and we lose premium paid. Of course, I don't have the experience you have, and I'm not trying to question what you do... but have you found this to be true?