Twisted Sister

This is basically the opposite of Lizards.

It is a slightly bearish strategy but having no downside risk if we make sure the net premium collected is more than the width of OTM Vertical Put Spread to have no downside loss.


  1. Sell OTM Call
  2. Sell OTM Vertical Put Spread

Ideal IV Environment: High

Maximum Profit:  Net Credit received

Max Loss: 

  • No loss on the downside. 
  • Unlimited loss in the upside.

How to Calculate Breakeven(s):

  • Downside: None
  • Upside: Strike Price of short call – credit received


  • Short NIFTY 9300CE at 124.65.
  • Short NIFTY  8600PE at 87.95.
  • Long NIFTY 8500PE at 69.45.

If the total credit is greater than the width of the Vertical Put Spread, then there is no downside risk. In this case, Total Credit = (124.65+87.95-69.45) =143.15 > Width of the Vertical Put Spread = (8600-8500) = 100.

As usual, An alternative way to view the setup is – Sell Strangle + Buy OTM Put. But unlike Big Lizard, there is no big twisted sister here because the strategy is not so popular enough to have another name to itself.

So, Sell Straddle + Buy OTM Put also falls under Twisted Sister

Anyways The payoff graph from the previous setup  looks like – 

Here is a table for quick graphical representation – 

  • Sell Strangle + Buy OTM Put
  • Sell Straddle + Buy OTM Put

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