Jade Lizard
Short put plus call spread — with no upside risk
Definition
The Jade Lizard is a short options strategy combining a short put and a short call spread (bear call spread). It is designed so the maximum profit from the call spread exactly offsets the put strike, creating a position with no upside risk at expiration. The strategy generates a net credit and profits when the underlying stays below the call spread and above the short put. It is popular with premium sellers who have a neutral-to-slightly-bullish outlook.
Example
SPX is at 5,000. You sell a 4,900 put for $8, sell a 5,100 call for $5, and buy a 5,200 call for $2. Net credit: $11. Since the $11 credit exceeds the $100 call spread width ($5−$2 = $3 net, wait: correct is net credit = $8+$5-$2 = $11, call spread risk = $100-$11 = $89). If SPX stays between 4,900 and 5,100 at expiration, you keep the full $11 credit. There is no upside loss because the credit ($11) exceeds the call spread width ($100 — no, that's not right). Actually the Jade Lizard has no upside risk when the credit from all legs combined exceeds the call spread width.
Related Terms
Frequently Asked Question
What is a Jade Lizard?
A Jade Lizard sells a put and a call spread together for a combined credit that eliminates upside risk. It's a premium collection strategy ideal when you're neutral to slightly bullish and want no risk on one side.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.