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Most Traders Build the Jade Lizard Wrong. Here's the 70-30 Rule.

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ticker lesson

Breakdown

0:00lesson

Jade Lizard risk vs strangle

  • Real risk is naked put downside
  • Jade Lizard = naked short put
  • Risk if stock drops = long 100 shares
  • Volatility inflation = key factor
1:42lesson

Jade Lizard setup parameters

  • True Jade Lizard = 30/70 strike width
  • Call spread 30 cents, put 70 cents
  • Adjustable width: $5/$10/$20
  • Neutral to bullish bias required
3:11lesson

Jade Lizard risk framework

  • No free lunch = inherent risk
  • Exploits faded theta decay
  • Bearish bias requires downward movement
  • Apple example = volatile skew opportunity
4:43lesson

Jade Lizard trade execution

  • Platform setup: $5 wide strangle
  • Third of width = 320 strike
  • Eliminates gap-up risk
  • Accepts top-side risk for neutral bias

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