Jade Lizard Strategy to make money Option Trading Journey #14
The market has been crazy for the past few weeks. For Tesla enthusiast myself, I am optimistic about the Tesla and market, but it is too hot at the moment.
As Tesla will be added to the S&P 500, I don't think that market will tank drastically so I decided to do Jade Lizard on it. What Jade Lizard is you sell naked put and have a vertical spread call on it. In my trade, it is the opposite, however, I don't know the other names of it so I called it Jade Lizard on it. I sell call and I have a vertical put. In theory, if the mark stays in the price range, I will get the full premium. If it goes above, I might lose with limited risk on the downside and unlimited risk on the upside.
However, the market cannot go to an unlimited high given a time constraint (less than a week). If the market were to be close to the $660 for the Tesla, most likely, I will roll it over to the next week with the higher price. Most likely $720 or $750 call. If Tesla to be down to around $580, I will roll down the bottom trade as well. As long as you play it right, I think there is a high possibility that you will not lose the money and actually making the money with this strategy. Besides, I already got a premium of $25 per share. As long as it does not beyond the $25 range, I will still make money for the week.
The account is growing faster than I expected. This account is a Traditional IRA and now I am transitioning to Roth IRA. In return, they hold my 20% withholding on it. For that reason, I am not buying the Tesla for the month. I will keep making money and make the cash to be larger and larger.
Until the transfer is complete (hopefully by tomorrow) I don't think I can make any more trades due to the settlement issue. I did not make any of the tradings today as well. The trade I am posting is yesterday's trade. For yesterday, even Tesla went up, both of the options made money. Today, as Tesla is down about $7 as of right now, both are making money as well. This is why I love this strategy so much. It does not matter whether the market is going up or down or flat, you can still make money. Granted if the market goes up too fast or goes down too fast, you can lose money, but I can take the hit with the limited risk.
Closed Trade:
None
Open Trade:
TSLA: 1 Dec 18 520/570 Put Vertical @ 6.0396
Current Position:
Call Option
WORK: 5 Dec 20 40 Call @ 3.2051may be closed @ 3.3
Selling Put Spread
SQ: 10 Dec 18 200/205 Put Vertical @ 1.0296
AMD: 10 Dec 18 85/88 Put Vertical @ 0.5527
TSLA: 1 Dec 18 520/570 Put Vertical @ 6.0396
Cover Call
TSLA: 10 Dec 18 690 Naked Put @19.68 (Cover Put)
TSLA: 114 shares
======================================================================= #sellingPut #optiontrade #sellingput #putvertical #PutVertical #trading #stock #option
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I am not a financial advisor. Any trades listed are my own personal trades and meant for educational purposes only.
Option trading bears high risk and high return strategy for trader.