Overwrite Backup every Day on DISK

I have configured a Backup job which does backup one Server on BE Local Disk. I have set Retention Preiod for 2 Days, and Life Cycle 2 days. but its not overwriting the old backup sets.

Since I am really short in sotrage, I want following...

Option A >   

Day 1  >  Full Backup Set 1
Day 2  >  Overwrite Backup Set 1
Day 3  >  Overwrite Backup Set 1
and so on , it should overwrite same backup set every time for same job.

Option B >   

Day 1  >  Full Backup Set 1
Day 2  >  Full Backup Set 2
Day 3  >  Overwrite Backup Set 1
Day 4  >  Overwrite Backup Set 2
so that I can have two backup sets for best practcies,