Jade Lizard

The name comes from the options trading community and doesn't have a specific origin story like some strategies. It's become the standard term for this short put + short call spread combination in options trading circles.

It depends on your goals. Jade lizard: More credit, more legs to manage, no upside risk if structured right. Short put: Simpler, lower margin, less credit. Choose jade lizard when you want extra credit and don't mind complexity.

You have options: 1) Accept small upside risk (often acceptable), 2) Narrow the call spread width, 3) Use higher delta options for more premium, 4) Choose different underlying with better premium, 5) Wait for higher IV environment.

This is the main risk. If the stock gaps below your short put, you'll have significant losses. This is why proper position sizing and stop losses are crucial. Consider jade lizards only on stocks you'd want to own.

Yes, and index options have the advantage of cash settlement (no physical delivery). You won't be assigned stock - instead, positions settle in cash. This can be simpler to manage than equity options.

Breakeven = Short put strike - Total credit received. For example, if short put is at 3100 and credit is 29 points (S$145), breakeven = 3100 - 29 = 3071. Stock must stay above 3071 to profit.

No upside risk is ideal but not mandatory. If you're bullish, you may not mind small upside risk. The key is understanding your risk profile. Some traders accept 10-20% upside risk for better put placement or more put premium.

Focus on the short put - that's your risk. Options: 1) Close entire position at predetermined stop, 2) Roll put down and out for credit, 3) Close put only if you want to let call spread decay. Don't let losses compound.

Margin is primarily based on the short put (like naked put margin) since that's the undefined risk portion. The call spread has defined risk and adds minimally to margin. Total margin is typically less than the capital needed for assignment.

If assigned stock and you want to hold it, immediately sell covered calls to generate income. Choose strike above your cost basis if possible. This turns 'losing trade' into income-generating position. Only do this if you're fundamentally bullish on the stock.

Put skew typically makes OTM puts relatively expensive (higher IV). This helps jade lizard construction since you collect more on the put side. Monitor skew levels - steeper skew = easier to achieve no upside risk. Also consider call skew when placing the call spread.

Conservative: Put 0.20, Call 0.15. Standard: Put 0.25-0.30, Call 0.20. Aggressive: Put 0.35, Call 0.25. Higher put delta = more premium but higher assignment risk. Balance based on your conviction level and risk tolerance.

High IV is double-edged. Positive: More premium, easier to achieve no upside risk. Negative: Higher probability of large moves that test the put side. In very high IV (crash fears), the put side may be tested by the move that caused high IV. Size conservatively.

Yes. Examples: 1) Jade lizard + long put = 'Super Jade Lizard' with defined downside risk, 2) Jade lizard on portion of portfolio, iron condors on neutral portion, 3) Rolling jade lizards into covered calls after assignment. Think of jade lizard as one tool in toolkit.

Early assignment is rare but possible, especially near ex-dividend or deep ITM. If assigned: 1) Don't panic - you now own stock at your chosen level, 2) The call spread is still in place (creates covered call situation), 3) Manage the stock position + call spread as covered call, 4) Or close everything and reassess.