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July 15, by Mike Butler. Robyn is a professional trader who has been involved in the markets for over two decades! We're lucky enough to have Robyn in the office each week to film a segment on the tastytrade network called "I'm Ready to Start. This post is designed to help bridge the gap between the mechanics she discusses and actually placing the trade.
Earnings announcements have a tendency to increase implied volatility due to the uncertainty of what may happen to the stock price after the earnings are announced. Some of the biggest stock movements come after an earnings announcement is made, so option premium is pumped up. Robyn looks to take advantage of this by selling a reverse jade lizard, which has a neutral to bearish assumption. A reverse jade lizard is constructed by selling an out of the money naked call, and an out of the money put spread.
The idea is to create a package with a credit that is larger than the width of the short put spread. This eliminates all risk to the downside, because even if the stock price plummets, we are still profiting from the total credit as it is larger than the potential downside risk.
Max profit is received on this trade if the stock price is between the short strikes at expiration. Robyn sells a Visit the follow page on dough to see what Robyn and our other featured traders are trading in dough! And, if you have any questions about Robyn's trade, leave a comment below! This week, Robyn traded a ratio put spread in Netflix.
See how and why she did it and learn the mechanics of her trade here! Robyn takes advantage of this high implied volatility environment and sells a strangle in OIH today!
Check out this article for all the details! Robyn is back at it with her trade of the week! This week, she takes advantage of high option premium in FCX, and deploys a custom strangle! Check out this article for more details!
Beginner intermediate Blog Sign Up Login. Robyn's Trade Of The Week: Robyn's trade has been adjusted since the segment aired on July 15, as explained below. Reverse Jade Lizard A reverse jade lizard is constructed by selling an out of the money naked call, and an out of the money put spread.
Setting Up The Trade On dough: To place the trade on the dough platform, follow the instructions below: Load EBAY onto the trade page. From the strategies menu, choose reverse jade lizard. In the advanced settings menu, change DTE to 9, and select weekly options. You can then adjust the strikes if needed. You can hit review and send to analyze the risk profile of this trade.
A reverse jade lizard combines a short naked call and a short put spread, both OTM. Max profit is received if the stock price is between the short strikes at expiration. There is no risk to the downside with a reverse jade lizard if the total credit exceeds the width of the put spread. Robyn Mendel , ratio , put spread , etf , implied volatility. Robyn's Ready To Trade Live: