Friday, August 28, 2015

Term of the Day: Alligator Spread

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August 28, 2015
Alligator Spread

An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market movements. An alligator spread is usually used in the options market to describe a collection of put and call options that may not be profitable.

Breaking It Down:

Pricing models and a more efficient market can help reduce the traditional spread on a security...

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Option
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