Type of Strategy

trading / potentially investing


varies by strategy

implied volatility

varies by strategy


The lizard strategies can be considered as specific variations on other strategies such as ratio spreads, butterflies, or straddles.  The lizards were named as a play on the phrase, “eliminates risk to one side.”

Each lizard strategy variation is matched to specific market environments and performance expectations.

Traders generally use the lizard strategies, although there may be a place for the strategies with an investor looking to acquire shares or sell shares short.  (Note that SOI does not recommend shorting stock).

Lizard Strategies – Jade Lizard Example

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Jade Lizard:     1-OTM short put and 1-OTM short call spread

Big Lizard:     1-ATM short straddle and 1-OTM long call

Reverse Big Lizard:     1-ATM short straddle and 1-OTM long put

Spiked Big Lizard:     1-ATM long put butterfly and 2-OTM short puts to finance the fly

(Can also be viewed as two ratio put spreads)

Each of the specific variations of lizard can be considered as a combination of other spreads, either as stated above or in alternate forms (ratio spreads, verticals with additional legs, etc.)

Each lizard strategy eliminates risk to one side of the spread.  Maximum profit and profit targets are unique to each strategy, along with breakeven points.  Traders can employ the various strategies to meet their needs performance expectations.

Comparison / Example – AAPL

Consider Apple (AAPL) currently trading at $120 per share as the underlying for each of the lizard strategies described.  The implied volatility of AAPL is 35, while each lizard will be constructed on a 45 DTE cycle.

Lizard Strategies – AAPL Example

Jade Lizard – AAPL

Big Lizard – AAPL

Reverse Big Lizard – AAPL

Spiked Big Lizard – AAPL