Alligator Spread

Posted by Blain Reinkensmeyer on Wednesday June 21, 2006

Today’s Stock Lingo word thanks to investopedia.com is an “Alligator Spread”, investopedia defines it as:

“A term referring to an unprofitable spread regardless of favorable market movements. This loss is due entirely to large commissions charged upon the transactions.”

No one likes alligator spreads, and they most usually occur when you are only trading with a small ammount of funds. Whenever you makes a trade in the stock market, make sure to check potential spreads. Simply put, don’t get bit by an alligator…

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