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The mirror image of a Jade Lizard: constructed so there is genuinely no risk at all on the downside — the trade-off is that the upside behaves like a naked Short Call, with genuinely unlimited risk if the underlying rallies hard.

A Reverse Jade Lizard combines selling one call with a Bull Put Spread (selling one put and buying a further put below it). The same condition applies as with a regular Jade Lizard, mirrored: if the total credit collected exceeds the width between the two put strikes, the position cannot lose money on the downside, no matter how far the underlying falls.

Legs 2 and 3 together are a Bull Put Spread, capping the maximum loss that spread alone could produce. The call is naked, same as a standalone Short Call. As with the regular Jade Lizard, the "no downside risk" property depends on the credit collected being large enough relative to the put spread's width — checked directly for these specific strikes, not assumed.

Three zones, mirrored from a regular Jade Lizard:

1. At or below the short put strike — the full credit is kept as profit, down to the short put strike; below it, the profit steps down slightly but — when the credit-exceeds-width condition holds — never turns negative, no matter how far the underlying falls.
2. Between the put strike and the call strike — flat, maximum profit — the full credit collected.
3. Above the call strike — losses grow the same way a naked Short Call's would, genuinely unlimited.

A Reverse Jade Lizard fits a neutral-to-bearish view — you don't want any risk if the underlying falls, and are comfortable with the same upside exposure a Short Call alone would carry. It's used when a trader is confident there's little reason to worry about a fall, and wants to remove that side of the risk entirely.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You're neutral to bearish and want zero risk from a fall.

1. Confirm the setup. You want to remove all downside risk while still collecting a credit, accepting upside risk similar to a naked Short Call.
2. Sell 1 call at the 24,200 strike, collecting a premium of 95.
3. Sell 1 put at the 23,800 strike, collecting a premium of 100.
4. Buy 1 put at the 23,700 strike for a premium of 58.
5. Calculate the total credit: 95 + 100 − 58 = 137 points, or ₹8,905 at this lot size.
6. Check the no-downside-risk condition: the put spread is 100 points wide, and the credit (137) exceeds that width — confirming there's no loss possible on the downside.
7. Calculate the reduced profit below the put spread: 137 − 100 = 37 points, or ₹2,405 — smaller than the maximum, but still positive at any price below.
8. Calculate the breakeven: approximately 24,337, above the call strike.
9. See how it resolves at expiry:
   • Nifty finishes between 23,800 and 24,200 → maximum profit of ₹8,905.
   • Nifty finishes at 20,000, or even 1,000 → still a profit of ₹2,405, never a loss.
   • Nifty finishes at 25,000 → a real loss, growing the further it rises, same as a naked Short Call.

Quick reference for the same trade:

Based on the worked example above. Notice the line never dips below zero on the left side of the chart, no matter how far left it goes — the mirror image of the Jade Lizard's shape. Move the cursor over the chart to see profit/loss at any price.

• The "no downside risk" property depends entirely on the credit exceeding the put spread's width. If the strikes or premiums don't satisfy that, this strategy loses its defining feature.
• Upside risk is genuinely unlimited, same as a naked Short Call — this bears repeating, since it's the single most important thing to understand before using this strategy.
• Margin requirements reflect that unlimited risk and will be substantial.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk on the short legs before expiry.