Finance Glossary

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Alligator Spread

Definition:

There are two definitions here - one relates to the centerfold out glossy pages of PlayGator magazine. At Shmoop, we are fans of the new Go Green theme.

The other definition relates to a situation where broker commissions "eat up" any profits that would have been available to making a trade, usually in reference to a derivatives trade involving put options and call options. The commissions in this case were so high that the trade doesn't make sense to execute.