This strategy is at its best if you are trading a product with IV skewed to the down side. This strategy: Sell an OTM put with high IV skew Hedge by selling an ATM call with higher IV Hedge the short call by buying a low IV Call This works great on indexes since they often have have a IV skew to the down side, example XPS and SPX
@binaysharma71443 жыл бұрын
Wonderful Strategy & even Wonderfully explained !!
@benjammin1051232 жыл бұрын
I'm thinking of it as a strangle with some upside protection a dollar away.
@vnymachado2 жыл бұрын
What is the advantage here over a short strangle? They are very similar...
@russzee4 жыл бұрын
I am curious to learn what would prompt someone to choose a Jade Lizard over a Wide Put Broken Wing Butterfly? A Put BWB will also yield a credit and provide no risk to the upside. Additionally, this strategy requires lower capital than a Jade Lizard, and also provides the opportunity to collect maximum credit if the underlying closes at the peak strike price at expiration. IMO, the only reason to choose a Jade Lizard over a PBWB is if I want to own the stock in the event the trade expires ITM on the Put side - which then begs the question if a Covered Call is probably a better choice than a Jade Lizard.
@tastyliveshow4 жыл бұрын
They are just similar directional trades with different micro-tradeoffs. It's all about your assumption and what you want to achieve with the trade.
@theowenssailingdiary52392 ай бұрын
Where was the upside risk with the short put anyway?
@Saahib_K4 жыл бұрын
So basically a 3 leg strategy with no cover on selling the naked put, that lizard can bite you with an unlimited loss venom, should the underlying tank on you.
@shihaowei1194 жыл бұрын
iron condor without long put leg
@investinglearningmachine39513 жыл бұрын
Minus premium you received 🌚🌚
@roopinderpalsinghrandhawa98463 жыл бұрын
UNLIMITED loss means 0. Who in their right mind will put their money on a shady stock?
@867530919743 жыл бұрын
same would happen to you if you were long any stock
@TradingEducation9113 жыл бұрын
@@86753091974 except with long stock, you have so much potential for upside, where you are getting $1 profit only.....
@retailalgotrader60166 жыл бұрын
solid explanation Mike
@giovannisilano3 жыл бұрын
Why dont u just sell a cash covered put than? For that 0.35 more? That u gain from calls?
@Rich-ey7jv2 жыл бұрын
Yeah, I don't get it. Played with it on Optionstrat. Seems like a waist of time. Moves your downside one percent, but lose more from the upside.
@zerototalenergy1502 жыл бұрын
exzcellent thank you !!!!!! what are the cons of jade lizard versus naked put ??
@ronsexton36854 жыл бұрын
Do you try for expiring with profit or 50% of the possible profit or ....what?
@tastyliveshow4 жыл бұрын
We typically close at 50% max profit for jade lizards.
@buggin334 жыл бұрын
In order to execute the trade through tasty works do I need a cash account value to cover the risk? Using cash not margin. Not sure if this is viable for smaller accounts
@tastyliveshow4 жыл бұрын
This strategy can be executed in IRA or margin accounts at tastyworks. IRA accounts would be cash secured, so less leverage there, but margin accounts would offer buying power relief.
@buggin334 жыл бұрын
tastytrade the margin required would be 20-40% of the position? Or what is the required amount of cash available
@buggin334 жыл бұрын
tastytrade thank you btw
@edmandell30643 жыл бұрын
Dumb question. But I don't think I can sell a naked put on Robinhood? Do I have to do a cash secured put or put credit spread to create the first leg on Robin hood?
@tastyliveshow3 жыл бұрын
Not too sure unfortunately - I would check your account to see if margined puts are allowed - otherwise spreads are the next best thing vs cash secured - cash secured takes too much capital and assumes the stock will go to zero which is a low probability event. Up to you though!
@mbrewer918ify3 жыл бұрын
What would be the average time to hold this option strategy. 1 week 2 weeks 1 month?
@habibbialikafe3394 жыл бұрын
i dont get your point about reducing your cost basis. i get if you do this and receive 1.03, its like you got the stock a little cheaper, but you were talking about 98.97. maybe you mispoke...
@867530919743 жыл бұрын
i heard him say $78.97 which is his SHORT PUT $80 - $1.03 = $78.97 cost basis or getting a $1.03 discount per share.
@YoursTruelyMe24 жыл бұрын
Interesting strategy Its a short strangle (short OTM call and short OTM put
@Jacob-ry3lu4 жыл бұрын
I thought that a short strangle was selling a put and call at the same strike price. The two short strikes here are different strike prices
@georgecarr682 жыл бұрын
Undefined risk can be extremely dangerous, in this case to the downside. Imagine had you sold this strategy on FB before that $80 drop! I learned this lesson in a horrible way years ago following Tasty Trade's recommended Naked strategy. Make a long story short it involved Solar City and me selling a Naked Call just trying to make 50% profit of $80. I ended up loosing -2,300 over night with Elon Musk's purchase! It's best to define your risk!!!
@simontse40883 жыл бұрын
What's the advantage of this over the Iron Condor Stretegy? The only thing that comes to mind is that it collects a bit more Premium than the Condor, but it would require more Margin capital since the short put is naked.
@tastyliveshow3 жыл бұрын
You have no risk to one side - that is the biggest difference and potentially the biggest advantage, where a jade lizard would be a winner on a big rally and an iron condor would not be.
@amolkulkarni24254 жыл бұрын
How to do middle adjustment in case of but movement
@tastyliveshow4 жыл бұрын
Can you rephrase or send an example to support@tastytrade.com?
@amolkulkarni24254 жыл бұрын
@@tastyliveshow sorry for typo mistake. I mean big movement. Say stock price reach 80 over a night.
@joesemo2 жыл бұрын
That ties up a lot of Margin. Probably only if you want to own the shares. Not for beginners.
@peterschiffer35824 жыл бұрын
Isn't that the same as a Back Spread ?
@tastyliveshow4 жыл бұрын
This is a strangle with a defined risk call option - front ratio is buying one and selling two further OTM of the same option type.
@scasinger1232 жыл бұрын
You kids are so cute. I've been doing this for decades, but I call it a 3-legged dog.
@maskof6 жыл бұрын
I got bitten by a jade lizard once. Once.
@867530919743 жыл бұрын
just wondering how and what happened, thx
@Maggarooni2 жыл бұрын
This is just an iron condor without the tail hedge. Why would you ever go naked? Just go buy a 5 delta put for .10 and be able to sleep at night. This is a trade where one bad trade wipes out the last 10 good ones.
@FriskyDingo19832 жыл бұрын
Not if you don't mind owning the stock
@soli95734 жыл бұрын
This guy is literally speaking Chinese my wife says. She knows nothing about the stock market. LOL
@mbrewer918ify3 жыл бұрын
No put protection, sounds like no sleep for a while.
@gilroberts18633 жыл бұрын
It is a Cash Secured Put (typically) so you would end up with the stock at worst I guess.
@Arashmidos20123 жыл бұрын
Could you bring some well spoken people onboard for your videos ? Good material, subpar execution.