A Big lizard is just selling a ATM straddle and then buying an upside call to cap the risk to the upside. If you are able to collect more credit from the straddle than the width between the straddle and long call, then you have no upside risk. You could even make money if you're wrong about the direction to the upside as well, because you've collected more than the width of the spread there (as in this example too).
In terms of risk, if I didn't want to hold shares of this underlying, I could just close the trade when it has reached 1x the credit received, or $612 in value. Since I collected $306 in credit, that would result in $306 in loss or 1x of the credit I received.
In terms of taking profit, TT has shown that optimal times to capture profits on straddles are around 25-30% of the max profit on these plays.