What is a Big Lizard?
Updated 12 July 2026 · by Theo Chen
A big lizard is a jade lizard pushed to its at-the-money extreme. You sell the at-the-money straddle — the put and call at the same strike — and buy a higher call to cap the upside, all for a net credit. When that big credit covers the call-spread width the trade has no upside risk; the catch is that you keep the full credit only if the stock pins the body strike, and the downside is an at-the-money cash-secured put.
Want to see whether your at-the-money credit clears the call width — and the breakeven, max loss and return on capital for a specific big lizard? Plug in your strikes and premiums.
Open the Big Lizard Calculator →How is a big lizard built?
Three legs, one expiration, one underlying:
- Sell an at-the-money put and sell an at-the-money call at the same body strike — that is a short straddle, and it collects the large credit.
- Buy a higher call above the body — this caps the call side and turns the naked call into a defined call spread.
The whole position is opened for a net credit, and because the straddle body is at the money that credit is fat. Size it to be at least the call-spread width and the upside risk disappears.
The payoff: a peak at the body, no upside risk
- Max profit = the full net credit, kept only if the stock finishes at the body strike, since the put and call sit together there.
- The upside = if the credit covers the call width, a rally leaves you with credit minus width — still a profit. There is no upside breakeven.
- The downside = an at-the-money cash-secured put: below the breakeven (body strike minus credit) you lose, down to that breakeven times 100 if the stock collapses.
A worked example
A stock trades at $100. With 45 days left you sell the 100 put for $3.00 and the 100 call for $3.20 (a $6.20 at-the-money straddle), and buy the 105 call for $1.00 — a $5.20 net credit against a $5.00-wide call spread.
- Net credit / max profit: $5.20 × 100 = $520, kept in full only at $100.
- No upside risk: credit $5.20 ≥ width $5.00, so even above $105 you keep $20.
- Downside breakeven: $100 − $5.20 = $94.80, also the cost basis if assigned.
- Max loss: ($100 − $5.20) × 100 = $9,480 if the stock goes to zero.
Sell the $100 put and $100 call (red), buy the $105 call (green) for a $5.20 net credit. The profit peaks at $100 and a $20 floor remains above $105 (no upside risk); the open, cash-secured-put loss falls away below $94.80.
Big lizard vs jade lizard
They are the same three-leg structure, sized differently. A jade lizard spreads the short put and call out of the money, so it keeps its (smaller) credit across a forgiving range and the downside starts further away. A big lizard piles both at the money for a much bigger credit, but the reward now depends on a pin, and the at-the-money short put means a larger downside. Choose the big lizard when you have real conviction the stock settles at a level and want the fattest credit; choose the jade lizard when you want a wider margin for error.
When a big lizard makes sense
Reach for it when you are neutral on a stock you would happily own at the money, you expect it to pin a level into expiration, and implied volatility is rich enough that the at-the-money straddle pays a credit comfortably above the call width. Don't let the "no upside risk" headline hide the bigger, at-the-money downside — size and secure the short put as carefully as a stand-alone cash-secured put, and only on a name you actually want to own.
The bottom line
A big lizard is a jade lizard on an at-the-money straddle - the fat ATM credit removes the upside risk and leaves only an at-the-money cash-secured-put downside, but the full profit is kept only if the stock pins the body strike, so it wants a pin, not a range.
Frequently asked questions
What is a big lizard in simple terms?
A big lizard is a jade lizard built on an at-the-money straddle. You sell the at-the-money put and call together and buy a higher call to cap the upside, all for a net credit. When that credit is at least the width of the call spread, the trade has no upside risk. The at-the-money straddle collects a large credit, but you keep the full amount only if the stock pins the body strike at expiration.
How is a big lizard different from a jade lizard?
Both are a short put, a short call and a long call for a credit with no upside risk. A jade lizard places the put and short call out of the money, so it keeps the full credit across a range. A big lizard places them together at the money, so it collects a much larger credit but keeps it in full only if the stock finishes at the body strike. The big lizard trades a wide profit zone for a fatter, more demanding credit — and a larger downside.
Does a big lizard have upside risk?
No, as long as the net credit is at least the call-spread width — which the fat at-the-money credit makes easy to satisfy. A rally caps the call spread loss at its width, which the credit already covers, so above the long call you still keep credit minus width. If you use an unusually wide call spread the credit may fall short, and then there is a capped upside loss the calculator flags.
What is the risk on a big lizard?
The downside, and it is larger than a jade lizard's because the short put is at the money rather than out of it. It behaves like an at-the-money cash-secured put: below the breakeven (body strike minus credit) you lose, down to that breakeven times 100 per contract if the stock falls to zero. Run it only on a stock you would be content to own at the body strike.
When should you use a big lizard?
When you are neutral on a stock you would own at the money, expect it to pin a level into expiration, and implied volatility is high enough that the at-the-money straddle pays a credit comfortably above the call width. Skip it if you have a directional lean — the symmetric body wants the stock to sit still — or if you would not want the shares at the current price.
Related questions
- What is a jade lizard, the out-of-the-money version?
- What is a twisted sister, the bearish mirror?
- What is an iron butterfly, which caps both sides of an ATM body?
- What is a cash-secured put (the big lizard's downside)?
Related tools and guides
Run your own numbers in the Big Lizard Calculator, widen the body for a forgiving range with the Jade Lizard Calculator, or cap the downside too with the Iron Butterfly Calculator. Size the downside like a cash-secured put, and see the setup conventions in strategy setups.
Educational explainer only — not financial advice. Examples are illustrative and exclude commissions, early assignment and dividends. Confirm the mechanics and size positions to your own risk tolerance.