Jade Lizard Sensex: Setup, Payoff and Risk Guide
- August 25, 2026
- Posted by: Lakshit Sharma
- Category: Market
Sensex level used in this article: Rs 77,538 (as of 20 Aug 2026). Next weekly (Thursday) and monthly (last Thursday of the month) expiry: 27 August 2026 (Thursday). Lot size 10. Sensex retained its weekly expiry slot on BSE under SEBI’s one weekly index per exchange rule; Bankex and Sensex 50 weekly contracts were discontinued instead, in November 2024. Both weekly and monthly Sensex contracts remain available.
Quick Answer
The jade lizard Sensex combines a short out of the money put with a bear call spread (a short call and a further out of the money long call), all on the same expiry. With Sensex at Rs 77,538, the jade lizard Sensex is designed so that the total credit collected is greater than or equal to the width of the call spread, which removes upside risk entirely: the position cannot lose money if the index rises, regardless of how far. The trade off is that the short put retains undefined downside risk, similar to a naked short put, making the jade lizard Sensex a directionally asymmetric strategy that profits from a stable to moderately bullish index.
The defining feature of the this strategy is its no upside risk design. By collecting a total credit that meets or exceeds the call spread width, the position sacrifices upside profit potential above the credit already collected in exchange for eliminating the possibility of a loss if the index rallies. This distinguishes the jade lizard Sensex from a simple short strangle or iron condor, both of which carry two sided risk.
The the position is generally considered a premium collection strategy suited to a neutral to mildly bullish outlook, since it explicitly removes concern about the index rising while retaining exposure to a significant decline, similar to selling a naked put.
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What Is the Jade Lizard Sensex?
The this trade is a three leg options strategy combining a short put with a bear call spread, all on the same expiry. It is built from a short naked put and a short call vertical spread positioned above the current index level.
The three legs of the jade lizard Sensex are:
- Sell an out of the money put below the current index level, generating premium and retaining undefined downside risk
- Sell an out of the money call above the current index level, as the short leg of a bear call spread
- Buy a further out of the money call above the short call, capping the risk on the call spread portion
When the combined credit from all three legs is greater than or equal to the width between the two call strikes, the this options approach has no risk on the upside: even if the index rises without limit, the maximum loss on the call spread portion is fully offset by the credit collected.
How Does the Jade Lizard Sensex Work?
With Sensex at Rs 77,538, a the spread might sell a put near 77,050, sell a call near 77,950, and buy a call near 78,400, all on the same expiry. The combined premium collected is compared against the call spread width to check whether the no upside risk condition is met.
| Parameter | Details |
|---|---|
| Index | BSE Sensex (BSE) |
| Expiry | Weekly (every Thursday) and monthly (last Thursday of the month). Effective September 2025 (NSE and BSE index expiry swap). Sensex retained its weekly slot; Bankex and Sensex 50 lost theirs. |
| Lot Size | 10 units (effective from January 2026 per NSE circular, reduced from 15) |
| Strategy Type | Neutral to mildly bullish, premium collection, one sided (downside) risk |
| Legs | 3 (1 short put, 1 short call, 1 long call) |
| Max Profit | Total credit collected, times lot size, if index stays between the short put and short call |
| Max Loss | Undefined below the short put strike (similar to a naked short put); zero above, if credit meets or exceeds the call spread width |
| Margin | Varies dynamically. Check live margin on your broker’s calculator before placing any order. |
Jade Lizard Sensex: Step by Step Setup
- Select the short put strike. With Sensex at Rs 77,538, a strike below the current level, such as 77,050, is sold as the put leg of the this strategy.
- Select the short call strike. A strike above the current level, such as 77,950, is sold as the near leg of the call spread portion.
- Select the long call strike. A further out of the money strike, such as 78,400, is bought to cap the call spread risk in the jade lizard Sensex.
- Check whether the total credit meets or exceeds the call spread width. This is the defining test for the jade lizard Sensex: if the combined premium from all three legs is at least equal to the difference between the two call strikes, the position has no upside risk.
- Set an exit plan for the downside risk. Because the short put retains undefined risk on a significant decline, decide in advance on a stop loss level or an adjustment plan, such as rolling the put down, if the index approaches the put strike.
Illustrative Payoff: Jade Lizard Sensex
Illustrative example for educational purposes only. Strikes and premiums are hypothetical and should not be interpreted as a trade recommendation. The jade lizard Sensex retains undefined downside risk similar to a naked short put.
Hypothetical setup: Sell 77,050 PE at Rs 95 per unit. Sell 77,950 CE at Rs 85 per unit. Buy 78,400 CE at Rs 35 per unit. Total credit: Rs 145 per unit. Call spread width: 450 points. Lot size: 10 units.
| Sensex at Expiry | P&L Per Lot (approx, Rs) | Outcome |
|---|---|---|
| Below 76,905 (breakeven) | Loss grows below this level (undefined) | Short put loss exceeds total credit collected |
| 77,050 to 77,950 | +1,450 (max profit) | All three options expire worthless; full credit retained |
| Above 77,950, any level | capped loss on call spread portion, offset by credit | Call spread loss partially offset by credit collected |
The key feature illustrated here is that above the short call strike, the jade lizard Sensex does not lose additional money as the index continues to rise, because the credit collected was structured to meet or exceed the call spread width. All of the risk in this hypothetical example is concentrated below the short put strike.
Greeks for the Jade Lizard Sensex
Delta: The jade lizard Sensex generally carries a positive delta from the short put, partially offset by the smaller delta from the call spread portion, resulting in a net position that benefits modestly from a stable to rising index.
Gamma: The jade lizard Sensex has negative gamma concentrated near the short put strike, where the position becomes increasingly sensitive to further downside moves.
Theta: Theta is generally positive for the jade lizard Sensex, since all three legs are net short premium, benefiting from time decay as expiry approaches, provided the index stays within the favourable zone.
Vega: The jade lizard Sensex is generally short vega across all three legs. A rise in implied volatility after entry is generally unfavourable, increasing the cost of closing the position.
When the Jade Lizard Sensex May Be Considered
The jade lizard Sensex may be considered when a trader has a neutral to mildly bullish view and wants to collect premium while removing concern about upside risk; implied volatility is elevated, providing a larger credit that makes meeting the no upside risk condition easier; or as an alternative to a naked short put where the added call spread premium improves the overall credit collected.
When NOT to Use the Jade Lizard Sensex
Consider avoiding the jade lizard Sensex when a significant decline in the index is a real possibility, since the short put retains undefined downside risk; implied volatility is too low to generate a credit that meets or exceeds the call spread width, undermining the no upside risk design; or you cannot monitor and manage the short put if the index approaches that strike.
Risk Management
The primary risk in the jade lizard Sensex is the undefined downside on the short put leg. Traders may manage this by setting a stop loss based on a multiple of the credit received, rolling the put to a lower strike or later expiry if the index approaches it, or closing the entire position if the underlying thesis of a stable to rising index no longer holds. The call spread portion of the jade lizard Sensex requires less active management once the no upside risk condition is confirmed at entry.
Transaction Costs
The jade lizard Sensex involves three option legs, each with its own transaction costs. Brokerage, exchange transaction charges, STT, GST, SEBI charges, stamp duty, and bid ask spread impact across three legs should be factored into the net credit collected, particularly since a smaller net credit makes it harder to satisfy the no upside risk condition.
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Jade Lizard vs Other Sensex Premium Collection Strategies
| Strategy | Upside Risk | Downside Risk | Max Profit | Complexity |
|---|---|---|---|---|
| Jade Lizard | None, if credit covers call spread width | Undefined (like a naked put) | Total credit collected | High |
| Short Strangle | Unlimited | Unlimited | Defined (net credit) | Medium High |
| Iron Condor | Defined | Defined | Defined (net credit) | Medium |
The jade lizard Sensex trades the two sided risk of a short strangle for a one sided risk profile, at the cost of giving up any additional profit if the index rallies strongly, since the call spread portion caps the benefit of a large upside move.
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Conclusion
The jade lizard Sensex is a premium collection strategy designed to eliminate upside risk by combining a short put with a call spread whose credit offsets its width. This makes the jade lizard Sensex directionally asymmetric: risk is concentrated entirely on the downside, similar to a naked short put, while a rally in the index causes no additional loss. Always verify current lot size (10 units from January 2026) and expiry schedule before executing any trade, and consult a SEBI registered investment advisor if you are new to multi leg options strategies with undefined risk components.
Disclaimer: Data and figures in this article are sourced from publicly available information and may or may not be accurate. All examples are illustrative and hypothetical only. Please verify all data including contract specifications, lot sizes, and expiry schedules with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
What is the jade lizard Sensex?
Ans. The jade lizard Sensex combines a short out of the money put with a bear call spread on the same expiry. When the total credit collected meets or exceeds the call spread width, the position has no upside risk, while retaining undefined downside risk similar to a naked short put.
Why does the jade lizard Sensex have no upside risk?
Ans. If the combined premium from all three legs is greater than or equal to the difference between the two call strikes, the maximum possible loss on the call spread portion is fully covered by the credit collected, so a rising index cannot produce a net loss on the jade lizard Sensex.
What is the maximum profit in the jade lizard Sensex?
Ans. The maximum profit is the total credit collected from all three legs, multiplied by the lot size, realised when the index closes between the short put strike and the short call strike at expiry.
What is the risk in the jade lizard Sensex?
Ans. The jade lizard Sensex carries undefined downside risk below the short put strike, similar to a naked short put. If the index falls significantly, losses on the put leg are not capped by any long put, making risk management on the downside essential.
What is the current lot size for Sensex options?
Ans. The Sensex lot size is 10 units effective from January 2026, reduced from 15. Always verify the current lot size on bseindia.com (or nseindia.com for cross reference) before placing any order.
Is the jade lizard Sensex suitable for beginners?
Ans. The jade lizard Sensex involves three legs and an undefined downside risk component, making it generally unsuitable for beginners. It is better suited to traders who already understand naked put risk and can actively manage the position if the index declines toward the short put strike.