Have you analyzed also what each of these constructs costs, and compared them to each other?... Nope!... Please let us know the result of also this calculation of yours, by posting it here, for the amusement of us all. Come on pls! Was I right, or was right?
Cost is irrelevant with synthetic positions when calculating MaxRisk ! Try applying your theory to other equivalent positions where one trades for a Debit, one trades for a Credit Bull Calls Spreads for Debit = Bull Put Spreads for a Credit Call/Put Flies for a Debit = Iron Flies for a Credit This is fun :-}}
@jamesbp, you just admitted that you have no clue of what you are talking, especially not of the topic in the OP, since now you try to distract by bringing-in other irrelevant contructs... FYI: Cost is not irrelevant! It's the MOST IMPORTANT METRIC when trading! As the basis for PnL and PnL% calcs.
Here my concluding analysis (just confirming what was said already in the OP): ITM LongStrangle (aka Guts) costs $2.62 OTM LongStrangle costs $0.62 Though both give the same GrossResult, the effective NetResult of the OTM LongStrangle is at least 4 times better due to the 4+ times better CostBase. The proof is simple: 2.62 / 0.62 = 4.2258 times better (in this example with the said parameters of S, DTE, K, Premium (or IV) etc). Said differently: when the same amount is invested in these 2 constructs then the result in case of a win for OTM LongStrangle will be 4.2258 times better than for ITM LongStrangle. Ie. a leverage factor of 4.2258. For example when (hypothetically) $2.62 is invested in both, then the PnL for Sx=16 at expiration is about 18.50 vs 4.38 --> 18.50 / 4.38 = 4.22 times better result. That's the result using fractional Qty to invest the same amount of $2.62 :
Looks like #ShitForBrains @Quanto has thrown the towel in and DELETED all posts from all threads, just when it was getting fun !
You must be hallucinating. B/c how were you able to post your above crap in this my thread then? You clearly lack some logic, man. But I've enough of your stupid insults. One more insult and you will be blocked by me. And: it was you who threw the towel when you posted this: But unlike you, I was not rude nor triumphed over it. That's the difference btw. your character and my character.