A 'Jade Lizard' trade involves selling a short put and call credit spread such that the premium of the short put covers the max loss of the call credit spread (and then some). The result is no risk to upside.
COIN is down 87% (!!) on the year.
I'm not convinced enough to take this trade just yet but will decide in the next couple days.
The timeframe is 30 days and with the holidays, the new year, the congressional turnover, etc., I don't think much is going to transpire one way or another. This is a neutral trade idea that should be a good fit for this exact sort of stagnated short-term circumstance.
+1 $41.5 long call 1/20.
-1 $40.5 short call 1/20.
-1 $30 short put 1/20.
Credit of around $183 at time of order execution.
1) Ideally the price will be under $40.5 and over $30 on 1/20. RESULT = credit of $183 confirmed.
2) If the price is ABOVE $41.5, then the call credit spread will need to be closed for max loss of around $100. RESULT = total profit $83. <--short $40.5 call will need to be closed if price is anywhere over $40.5 on 1/20.
3) If the price is below $30 on expiration the put will be assigned and 100 shares of coin will need to be purchased at an average cost of $28.17 per share ($3,000 - $183). Selling calls at strikes >$28 will be the next logical step until assignment and shares sold.
COIN is down 87% (!!) on the year.
I'm not convinced enough to take this trade just yet but will decide in the next couple days.
The timeframe is 30 days and with the holidays, the new year, the congressional turnover, etc., I don't think much is going to transpire one way or another. This is a neutral trade idea that should be a good fit for this exact sort of stagnated short-term circumstance.
+1 $41.5 long call 1/20.
-1 $40.5 short call 1/20.
-1 $30 short put 1/20.
Credit of around $183 at time of order execution.
1) Ideally the price will be under $40.5 and over $30 on 1/20. RESULT = credit of $183 confirmed.
2) If the price is ABOVE $41.5, then the call credit spread will need to be closed for max loss of around $100. RESULT = total profit $83. <--short $40.5 call will need to be closed if price is anywhere over $40.5 on 1/20.
3) If the price is below $30 on expiration the put will be assigned and 100 shares of coin will need to be purchased at an average cost of $28.17 per share ($3,000 - $183). Selling calls at strikes >$28 will be the next logical step until assignment and shares sold.