What is an Alligator Spread?
” Alligator spreads are something of a rarity, although they are definitely a welcome phenomenon for an financial advisor who works on a commission basis. Essentially, an alligator spread is a mix of put options and call options that, when executed in the right order and time frame, will result in very hefty commissions for the agent. Here is some information about how the alligator spread got its name, as well as how this process can impact the underlier. .
Alligator spreads are something of a rarity, although they are definitely a welcome phenomenon for an financial advisor who works on a commission basis. Essentially, an alligator spread is a mix of put options and call options that, when executed in the right order and time frame, will result in very hefty commissions for the agent. Here is some information about how the alligator spread got its name, as well as how this process can impact the underlier. While no one would begrudge any financial professional from making a decent commission on any transaction, the fact is that the unique blend of put options and call options that help to set up an alligator spread can result in an extremely high commission. In fact, the commission can be so high that when all the dust settles, the investor realizes very little from the deal. Most of the profit ends up going to the advisor in the form of a commission. Thus, while an alligator spread is a nice windfall for any broker or other type of fina
