# Jade Lizard Calculator - No Upside Risk & Breakeven Source: https://theoptionsbench.com/jade-lizard-calculator/ > Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/jade-lizard-calculator/ --- Jade lizard - key facts A Jade Lizard sells an OTM put and an OTM call spread for a net credit; when the credit covers the call-spread width it carries no upside risk, leaving only cash-secured-put downside risk. Net credit / max profit (put premium + short call premium - long call premium) × 100 - kept between the put and short-call strikes. No upside risk when Net credit ≥ call-spread width (long call - short call). Then a rally still nets credit - width. Downside breakeven Put strike - net credit (per share) - also the cost basis if assigned. Max loss (Put strike - net credit) × 100, if the stock falls to zero (cash-secured-put downside). Return on capital Net credit ÷ put strike; annualized = × 365 ÷ days to expiration. Want the full explanation? Read how to set up a Jade Lizard . How to set it up Outlook: Neutral-to-bullish with rich premium: you want the stock to hold up or drift higher, you'd own it at the put strike, and you want the total credit to cover the call spread so the upside can't hurt you. Ideal DTE 30-45 days - the standard premium-selling window where theta does real work and you can still react. Go shorter only on a name you'll watch closely. Strike selection Sell the put around 0.30 delta, below a support you actually believe in. Then build a NARROW call spread above - short call near 0.20-0.30 delta, long call only $1-3 higher. The narrow call spread is what lets the credit exceed its width. The no-upside-risk rule Size it so the total net credit is at least the call-spread width - that is the whole point. A credit below the width leaves upside risk. Rich put premium plus a narrow call spread is what gets you there; the calculator flags whether your setup clears the bar. Enter when IV Rank elevated (roughly 50+) so both the put and the call are rich - a fat put credit is what covers a narrow call spread. In thin IV the no-upside-risk structure is hard to build and barely pays. Take profit Close around 50% of the credit, like a cash-secured put - the back half decays slowest and the gamma near the short put isn't worth squeezing. Manage / exit Manage the short put like any cash-secured put: at ~21 DTE, or sooner if it's tested, roll it or take assignment. The capped call spread usually takes care of itself - don't let a tested put ride into expiration. Use it when: You're neutral-to-bullish on a stock you'd happily own at the put strike, IV is rich, and you want premium income with the upside risk removed. Skip it when: You're outright bearish or expect a sharp drop - the downside is open like a cash-secured put - or IV is too thin for the credit to cover the call width. Starting points, not rules - the conventions experienced sellers reach for first. Your account, thesis and risk move every number here. See every strategy's setup -> ## How to use this calculator - Enter the current share price and days to expiration. - Enter the short put - its strike and the premium you collect. - Enter the call spread - the short call (sold) and long call (bought) strikes and each premium. - Set the number of contracts - each multiplies the credit and the risk by × 100. - Read the result: net credit, whether there is upside risk, the downside breakeven, max loss and return on capital. **What it tells you:** whether your credit is large enough to remove the upside risk, and what the cash-secured-put downside costs if the stock falls. ## How this calculator works A Jade Lizard has three legs in one expiration: a **short put** below the price, a **short call** above it, and a **long call** further out that caps the call side. The total **net credit** is the two premiums you collect minus the one you pay. Between the put strike and the short-call strike every option expires worthless and you keep the full credit - that is your max profit. The signature check is **net credit versus call-spread width**. If the credit is at least the width (long call - short call), a rally can only cost you the call spread's width, which the credit already paid for - so the upside cannot become a loss, and above the long call you still keep credit - width. The calculator flags this as **no upside risk**. If the credit is smaller, it shows the capped upside loss and the upside breakeven instead, rather than hiding it. The real risk is the **downside**. The short put is a cash-secured put: below the breakeven (put strike - net credit) you lose, all the way down to that breakeven times 100 if the stock goes to zero. Capital and return on capital are shown on the cash-secured-put basis (put strike × 100), the standard way to size it. ## Worked example A fixed, hypothetical illustration - not live market data. A hypothetical stock trades at $100. With 45 days to expiration you sell the 95 put for $1.50, sell the 105 call for $1.20 and buy the 107 call for $0.40 - a $2.30 net credit against a $2.00-wide call spread. - Net credit / max profit: $2.30 × 100 = $230 per contract. - No upside risk: credit $2.30 ≥ width $2.00, so even above $107 you keep $30. - Downside breakeven: $95 - $2.30 = $92.70 (also the cost basis if assigned). - Max loss: ($95 - $2.30) × 100 = $9,270 if the stock goes to zero. - Capital / return: $95 × 100 = $9,500 secured; $230 ÷ $9,500 ≈ 2.4%, about 19.6% annualized. ## Edge cases this calculator handles - A credit that doesn't cover the call width. The position then does carry upside risk. Rather than reject it, the calculator flags it and shows the capped upside loss and the upside breakeven, so you can see exactly how much credit you are short. - The downside is open, not capped. Unlike a condor, there is no long put, so the max-loss figure is the cash-secured-put loss to zero - the calculator shows that honestly instead of a small "defined" number. - A net debit. If your premiums net to a debit it is not a Jade Lizard at all; the verdict says so rather than printing a misleading profit. - Zero days to expiration. Annualized return shows "N/A" rather than dividing by zero. Found this useful? Get the bi-weekly email Strategy breakdowns, the edge cases these calculators surface, and trades worth watching - free, no noise. Join the free email -> ## ⚠ Common mistakes - Forgetting the downside is naked. The "no upside risk" headline lulls traders into ignoring the short put. Only run it on a stock you would own at the strike, and secure the cash. - A credit below the call width. Then you have given up the whole point - there is upside risk again. Adjust the strikes or wait for richer premium until the credit covers the width. - Selling into thin volatility. A skinny credit barely covers a narrow call spread; rich implied volatility is what makes the no-upside-risk structure pay. - Holding a tested short put to expiration. If the stock breaks down, manage the put like any cash-secured put - roll or take assignment - don't freeze. ## Frequently asked questions What is a Jade Lizard? A Jade Lizard sells an out-of-the-money put and an out-of-the-money call spread (sell a call, buy a higher call) in one expiration, for a net credit. When the credit is at least the width of the call spread, the position has no upside risk - a rally cannot lose money. The risk is to the downside, where the short put behaves like a cash-secured put. Does a Jade Lizard have upside risk? Not if you collect a net credit at least as large as the call-spread width. A rally caps the call spread loss at its width, which the credit fully covers, so the worst the upside can do is leave you with the credit minus the width - still a profit. If the credit is smaller than the width, there is a capped upside loss above the short call strike plus the credit. What is the risk on a Jade Lizard? The downside. The short put behaves like a cash-secured put: below the breakeven (put strike minus net credit) you lose money, down to (put strike - credit) × 100 per contract if the stock falls to zero. Size and secure it like a cash-secured put - only run it on a stock you would be content to own at the put strike. What is the breakeven on a Jade Lizard? The downside breakeven is the put strike minus the net credit per share - also your effective cost basis if the put is assigned. When the credit covers the call-spread width there is no upside breakeven, because the upside cannot turn into a loss. When should I use a Jade Lizard? When you are neutral-to-bullish on a stock you would not mind owning at the put strike, implied volatility is rich, and you want premium income with the upside risk removed. Skip it if you are outright bearish - the downside is open like a cash-secured put - or you expect a sharp drop.