Jade Lizard

A jade lizard is a sophisticated three-leg income strategy that eliminates upside risk when properly structured, making it ideal for traders with bearish to neutral market outlook who want to generate consistent premium income. This advanced strategy combines a short call spread with a short put, creating a position that has no risk above the higher call strike while generating substantial income from elevated implied volatility. The key advantage is the elimination of upside risk, which makes it superior to traditional short strangles in bearish market environments. Professional traders favor this strategy when they have high confidence that the underlying will not rise above a certain level but want to capture income from volatility compression. The strategy requires the credit received to exceed the call spread width to ensure the risk-free upside characteristic. Jade lizards are particularly effective in high implied volatility environments where premium income can be maximized

If NIFTY is at ₹25,800, set up: Sell ₹26,000 Call for ₹80, Buy ₹26,200 Call for ₹50, Sell ₹25,400 Put for ₹45, creating ₹75 net credit with no upside risk above ₹26,200 and maximum profit if NIFTY stays between ₹25,400-₹26,000.