TRADE IDEA: GLD AUG 16TH 125/126/132/135 SYNTH REV JADE LIZARD
Metrics:
Max Profit: $124/contract
Max Loss/Buying Power Effect: $176/contract
Break Evens: $133.24 (No Downside Risk)
Delta/Theta: -10.46/.22
Notes: A Jade Lizard is ordinarily a short put plus a short call vertical where the total credits collected exceeds the risk attributable to the short call vertical, making it a no upside risk setup. A Reverse Jade Lizard is the inverse of that -- a short call plus a short put vertical where the total credits collected exceeds the risk attributable to the short put vertical, making it a no downside risk setup. In this particular case, you would be going defined risk, but be collecting more in credit than attributable to the risk associated with the short put vertical which is a one-wide with 1.00 of max risk, so it's a no downside risk setup.
As with an iron condor or short strangle, an ideal finish is between your short strikes (126 on the put side, 132 on the call), but you'll also realize profit anywhere below 133.24 and even if the underlying retraces dramatically and blows through your short side. Naturally, strikes may have to be tweaked, depending on what /GC does between now and New York open.
Max Profit: $124/contract
Max Loss/Buying Power Effect: $176/contract
Break Evens: $133.24 (No Downside Risk)
Delta/Theta: -10.46/.22
Notes: A Jade Lizard is ordinarily a short put plus a short call vertical where the total credits collected exceeds the risk attributable to the short call vertical, making it a no upside risk setup. A Reverse Jade Lizard is the inverse of that -- a short call plus a short put vertical where the total credits collected exceeds the risk attributable to the short put vertical, making it a no downside risk setup. In this particular case, you would be going defined risk, but be collecting more in credit than attributable to the risk associated with the short put vertical which is a one-wide with 1.00 of max risk, so it's a no downside risk setup.
As with an iron condor or short strangle, an ideal finish is between your short strikes (126 on the put side, 132 on the call), but you'll also realize profit anywhere below 133.24 and even if the underlying retraces dramatically and blows through your short side. Naturally, strikes may have to be tweaked, depending on what /GC does between now and New York open.
