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Finance Dictionary and Glossary of Investment Terms
alligator spread
Definition 1.
A position consisting of a combination of put options and call options that collectively create commissions so high that it is almost impossible to turn a profit regardless of which direction the underlier moves. The term originates from the idea of the spread "eating the investor alive."
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Definition 2.
A term referring to an unprofitable spread regardless of favorable market movements. This loss is due entirely to large commissions charged upon the transactions.
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