Jade Lizard
Options strategy · Level 4 · Naked options
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Sell a put, and sell a call spread above it. If the credit is at least as big as the call spread’s width, a rally cannot lose money: the only risk is a fall, as with a short put.
Where Tradecraft teaches it
Level 4 · Naked options, in the lesson “The jade lizard”: A short strangle with its call side capped: how to tell whether any upside risk is left.
Related terms
- Short Iron CondorA short put spread plus a short call spread.
- Short PutSell a put and collect the premium. You are paid to promise to buy 100 shares at the strike if the stock falls below it.
- Calendar Spread – CreditBuy the near-term option and sell the longer-term one at the same strike.
- Call Ratio SpreadBuy one call and sell two higher-strike calls.
- Diagonal Spread – Long leg expires firstBuy a near-term option and sell a longer-term one at a different strike.
- Put Ratio SpreadBuy one put and sell two lower-strike puts.