alligator(redirected from Alligators)
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An option spread with unusually large commissions for the involved broker(s). In an alligator, the commissions are so large that the potential profit from the spread is not worth the expense. In such a situation, the investor holding the spread is said to be "eaten alive."
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An option spread in which the commissions are so large a part of any potential profit that the investor gets eaten alive. Obviously, alligator spreads are of greater benefit to the broker than to the investor.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.