Jade Lizard

Description

Selling an OTM Put and an OTM Bear Call Spread.

Trading Logic

High premium strategy with no upside risk if premium > spread width.

Practical Example

Stock at $100. Sell $90P ($3), sell $110C ($2), buy $115C ($1). Net credit: $4.

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P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss