Reverse Jade Lizard Calculator
A reverse jade lizard sells an out-of-the-money call and a bull put spread below the price. It is the mirror of the jade lizard: when the credit collected is at least the width of the put spread, the downside risk vanishes, leaving only upside risk from the short call.
Interactive calculator
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Key characteristics
- Sell an OTM call + a bull put spread (short higher put, long lower put): a net credit.
- If the credit ≥ the put-spread width, there is no downside risk at all.
- Profits if the stock stays between the breakevens; max profit is the credit.
- Risk is to the upside, from the single short call above the price.
When to use a reverse jade lizard
Use it when you are neutral to slightly bearish and want premium income with the downside fully defined. The bull put spread caps the risk below, and structuring the trade for a large enough credit removes that downside risk entirely.
It is the exact mirror of a jade lizard, which removes upside risk instead. Choose the reverse version when you are more worried about a drop than a rally and prefer your defined-risk wall underneath the price.
Risks and management
The exposure is the short call above. A sharp rally is the danger — the single short call is unhedged on the upside, so a big move up can produce large losses, much like a naked call.
Manage it by rolling the short call up and out if the stock rallies, and take profits once the premium has mostly decayed. As a short-volatility trade, avoid opening it when implied volatility is already low and a move is likely.
Calculate it live
Use the free OptionProfit Reverse Jade Lizard calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
- The mirror of a jade lizard: short call + put spread, no downside risk.
- Achieved when the credit collected covers the put-spread width.
- Profit zone is a wide band; max profit is the net credit.
- Upside risk only — manage or roll the short call on a rally.
Frequently asked questions
How is this different from a jade lizard?
A jade lizard sells a put plus a call spread and has no upside risk. The reverse jade lizard sells a call plus a put spread and has no downside risk — it is the mirror image.
When is there truly no downside risk?
When the total credit you collect is at least the width of the bull put spread. Then even at zero the put spread’s loss is fully offset by the premium.
What is the worst case?
A strong rally. The lone short call above the price is unhedged, so the upside loss can be large — treat that call like a naked short call for sizing.
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