Big lizard
The big lizard sells the at-the-money straddle and buys one out-of-the-money call. If the total credit is at least the distance from the ATM strike to the bought call, a rally of any size leaves the position no worse than break-even, so all the risk sits on the downside. This version trades it once per NIFTY monthly series and takes profit early at 25% of the credit.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
Only 13 trades means no condition reached the eight-trade mark, but the pattern in this test is stark and follows from the structure. The 6 trades during which NIFTY rose more than 1% all won, making ₹74,725, and the 3 flat ones made ₹30,407: the bought call covered the upside, and quick 25% targets were reached. The two trades during which NIFTY fell more than 1% lost ₹2,44,111 together, because the short put has no protection and neither reached its target. Small, frequent gains were wiped out by falls.
About this strategy
- Once per NIFTY monthly series, on the first session with at least 20 days to expiry, act at 09:30.
- Sell the ATM call and ATM put, and buy the call nearest 2% above the ATM strike, one lot each.
- Check that the net credit is at least the gap between the bought call and the ATM strike. If not, move the bought call one strike closer at a time until it is.
- Close when the profit reaches 25% of the net credit, the most the trade can make.
- An optional stop closes the trade if the future falls a set percentage below the short strike; it is off by default.
- Otherwise close at 15:15 on expiry day.
Why traders use it
The big lizard collects the large premium of an ATM straddle while removing the upside risk that makes naked straddles frightening. Traders who think a market is more likely to drift up or sideways than to fall sharply like that trade-off. Taking profit at a quarter of the maximum keeps holding periods short and win rates high, which is a common way option sellers manage monthly positions.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy made 13 trades and won 11, each banking 25% of its credit for an average of ₹11,962. The two losers averaged ₹1,22,055. One March trade ran to expiry during a fall and lost ₹1,95,410, and a trade still open when the data ended was closed at a ₹48,701 loss. The total was a ₹1,12,524 loss before costs and ₹1,74,884 after ₹20 per order and bid-ask slippage. This is the classic short-volatility profile: a high win rate undone by a rare large loss.
What the settings do
Risks
- The short put is naked, so a sharp fall can produce losses many times the credit collected.
- With the downside stop off by default, a losing trade can run all the way to expiry.
- A high win rate can hide the size of the rare loss until it arrives.
- Holding a monthly position over weeks exposes it to gaps on overnight news.
Who it suits
Experienced option sellers with a neutral-to-bullish view, full margin for a naked short put, and a clear plan for the downside, such as switching on the optional stop.
Questions traders ask
What is a big lizard option strategy?
It is a short ATM straddle plus a long out-of-the-money call. When the total credit is at least the distance between the ATM strike and the bought call, a rally cannot cost money because the call spread is fully paid for. All the risk is on the downside through the short put.
Is the big lizard strategy profitable?
Not in this test. On NIFTY from 1 Oct 2025 to 30 Sep 2026 it won 11 of 13 trades but lost ₹1,12,524 before costs and ₹1,74,884 after ₹20 per order and bid-ask slippage (statutory charges not included), mainly from one large loss. Past results do not guarantee future ones.
How is a big lizard different from a jade lizard?
A jade lizard sells an out-of-the-money put and an out-of-the-money call spread. The big lizard sells the at-the-money straddle instead, which collects much more premium but places the short put right at the money, so losses start immediately if the market falls.
Why take profit at 25% of the maximum?
The maximum profit needs NIFTY to finish exactly at the ATM strike on expiry, which rarely happens. Banking a quarter of it shortens the holding period and reduces exposure to a later fall, at the cost of leaving potential profit behind.