Reverse Jade Lizard

Options Advanced NIFTY BANKNIFTY FINNIFTY Stock Options

Bearish to Neutral - want stable or falling prices

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Quick Reference

Strategy Type Hybrid - Bearish Short Premium with Downside Protection
Market Outlook Bearish to Neutral - want stable or falling prices
Risk Profile No/Minimal Downside Risk (if credit ≥ width), Unlimited Upside Risk
Reward Profile Maximum Credit Received when price between short put and call
Time Horizon Weekly (5 days) or Monthly (21-30 days)
Capital Requirement SPAN margin Rs.60,000-80,000 per lot
Best Used When Bearish bias in elevated IV environment, want strangle-like income without downside crash risk

When to Use This Strategy

Bearish bias in elevated IV environment, want strangle-like income without downside crash risk

India-Specific Notes

Nse Considerations

Trading Hours 9:15 AM - 3:30 PM IST
Weekly Expiry Thursday (NIFTY, BANKNIFTY, FINNIFTY)
Monthly Expiry Last Thursday of the month

Margin Framework

Type SPAN + Exposure Margin
Naked Put Requirement Significant margin for uncovered put
Typical Margin Range ₹80,000 - ₹1,50,000 per lot for index options
Margin Calculator Use NSE SPAN calculator for exact requirements
Margin Benefit Call spread portion reduces overall margin slightly

Taxation

Stt On Premium 0.05% on sell side (options)
Stt On Exercise 0.125% on intrinsic value if ITM at expiry
Income Classification Business income for frequent traders
Gst On Brokerage 18% on brokerage charges

Liquidity Notes

Best Instruments NIFTY and BANKNIFTY weekly/monthly options
Avoid Deep OTM options in illiquid stocks
Optimal Strikes ATM puts, slightly OTM calls for best liquidity
Bid Ask Spread Expect 1-3 points spread on liquid index options

Example Pricing

Typical Atm Put Premium ₹200-350 for weekly, ₹450-700 for monthly
Typical Otm Call Spread ₹80-150 net credit for 200-point wide spread

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