In the cases 1 and 2, in Post # 37739, above there is yet another possibility: The prices keep dropping below the point at which Case 2 has exhausted its Reserve. At that point, and at a lower price, the cases remain identical because only $ 10000 can be invested.
So, the question as to which method is better is to be based on the possibilities. . .chances. . . that for selected equities that tend to make big drops and are, for the criteria chosen, not likely to be varnishing equities.
I would say that Case 1 is the better Option because the price Y13 is easier reached and quicker than the higher price Y23. For a certain volatility Index Case 1 is more profitable.