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Jade Lizard

Spreads3 legscreditbullish to neutral

A short put plus a bear call spread, sized so the total credit exceeds the call spread's width. Structured correctly it has no upside risk at all.

The Strategy Builder does not construct this one — the reference shelf is broader than the picker. You can still build it by hand: add the legs below in the builder's leg table.

What it is

A short put with a bear call spread stacked on top. The put carries the downside; the call spread caps the upside.

The defining condition is arithmetic: total credit must exceed the call spread's width. When it does, even the worst upside outcome still nets a profit, because the credit collected is larger than the most the call spread can lose.

The result is a structure with risk on one side only. That makes it a directional-ish premium play rather than a neutral one.

How it is built

On a $50 stock. Every figure beneath the diagram is computed from these legs by the same engine the Strategy Builder uses.

This one departs from the guide's shared chain. The structure's defining property is that the total credit exceeds the call spread's width, and with the shared chain's $5-wide call spread that is not achievable — the example would show a lizard with upside risk, which is precisely the thing that makes it not a lizard. A $2.50-wide call spread is used instead.
ActionWhatStrikeQtyPrice
Sellput$451$2.00
Sellcall$551$1.80
Buycall$57.51$1.00
$0$45$55$57.5now $50$42.20stock price at expiryprofit / loss
Max profit
$280
Max loss
−$4,220
Break-even
$42.20
Net credit
$280

Collateral held: $4,500 — the gross amount tied up, before the premium received.

A $45 put sold for $2.00, plus a $55/$57.50 call spread sold for $0.80 — $2.80 of credit against a $2.50-wide call spread. Because the credit exceeds the width, the right-hand tail is flat and ABOVE zero: no matter how far the stock rallies, the position cannot lose. All the risk sits below the put.

Reading the shape

Flat and profitable above the long call — the signature. The line sits above zero, not at maximum loss, which no other credit structure here does.

Flat at the full credit between the put strike and the short call.

Sloping down below the put strike, with the same open-ended downside as any short put.

How it is used

It suits the same conditions as a cash-secured put — a strike you would accept owning — with the call spread added to harvest extra credit from elevated call-side volatility.

The check before entry is the arithmetic: credit against call-spread width. Miss it and the position has risk on both sides, which is a different and worse structure.

Because the downside is a naked short put, the capital and the assignment considerations are the put's, not the spread's.

The name obscures a simple idea: it is a short put whose premium has been topped up by selling a capped piece of the upside. Judge it as a put first.
If the credit does not exceed the call spread width, there is upside risk and the structure's whole appeal is gone. This is the single thing to verify.
The downside is unchanged from a naked put. The clever upside does nothing about the risk that actually sizes the position.

Like everything in this guide, these are descriptions of structures and conditions — context for your own decisions, not instructions to trade.

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