Rising Star Teaches Me How to Win with Jade Lizards | Rolling Trades Series
Apr 13, 2021
So...how was everyone’s 2020? As spring arrives in the midwest and the vaccine gets rolled out, I’m super excited for things to get back to some semblance of normalcy. 2020 was definitely a year of fear, uncertainty, and despair and that was just on the dating apps. I will be brutally honest and say that I did not trade a whole lot during 2020. As a newbie trader, I tried to make mechanical trades in March and April of 2020, but the violent swings during the afternoon press conferences or on random bits of news was enough for me to say, “welp, that’s enough trading for today” and then retire into the fort I had built out of my surplus of toilet paper.
Also, I had become very spoiled. My job at tastytrade meant I sat mere feet away from the best traders in the game and when I had questions I could literally roll my office chair over to Katie, Mike, Dr. Data, Beef, or if I felt like getting insulted, Tom Sosnoff. But in the chaotic first few months of the pandemic I didn’t feel like reaching out to anyone because, well, we were all dealing with a lot.
But I did continue to watch the show every day and I did watch videos on demand and I stayed engaged in the markets (because my job is to report on the markets) but I wasn’t trading. The pandemic was rough for me. I live alone with a sassy, geriatric chihuahua but not having a “life partner” or roommate, I was perilously close to pulling a Tom Hanks and making inanimate objects my “bestie”.
Before my descent into madness got too far, we wrapped up Rolling Trades season 1, filmed via Zoom and I was finally back to trading again. We had so many cool ideas and concepts for how we were going to finish that first season but of course it depended on a cool venue/restaurant and the ability to stand closer than 6 feet apart. My heart goes out to all of the restaurant and bar owners who were kind enough to let us film in their establishments during the first season, and once I’m fully vaxxed I’m determined to eat my way across this city.
Once the first season wrapped up, Beth the production manager was like, “well what are you guys going to do for Season 2?” It was actually Jessica, the producer and editor of Rolling Trades who came up with the idea to feature Rising Stars. Rising Stars are regular tastytrade viewers who have taken the tastytrade mechanics to a whole new level and were featured on the show in the past.
The all-Zoom format of Season 2 would be a great way to reach out to everyone because these options trading experts are spread out all over the country. I’ll be honest, I was bummed about not getting to get my eat and drink on during Season 2, but I was super intrigued by learning new trades from people who do things a bit differently.
So that brings us to the here and now and to the very first episode of Rolling Trades Season 2! We were delighted to be able to have Fauzia on the show. She has appeared on Rising Stars, was a guest on my podcast, Connect the Dots, and is instrumental in the Women Traders Facebook group. My goal for this season of Rolling Trades is to learn as many new concepts, strategies, and tips to trade management as possible and Fauzia started us off strong with a Jade Lizard.
The Jade Lizard is a neutral to bullish options strategy. It consists of a short call vertical spread combined with a short naked Put option. When the credit received is LARGER than the width of the call spread, there is no risk to the upside. Ideally, the stock stays within a given range. Maximum profit on the position is the credit received. As tastytraders, we like to put on this type of strategy in times of High Implied Volatility. Additionally, this strategy can be used when put skew is present.
I’m a visual learner, so it was cool to actually put this trade on and see how it played out in real time. I don’t want to spoil the episode, but I hope you enjoy this season of Rolling Trades and that if you were on the sidelines that you hop off that bench and get back in the game just like me. Special thanks to Fauzia for taking the time out of her busy schedule to help me learn to master the mechanics of the Jade Lizard! You can follow all of her trades on the tastyworks follow page!
Top 3 Jade Lizard Takeaways
Great strategy for underlyings that seem like they’re headed to the moon!
Multiple options for trade management. (See how I managed this in the episode)
If you’re unsure of how to start, there’s a Jade Lizard option in the drop down menu on tastyworks. Start there and then adjust your strikes!
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
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