Alligator Spread

In trading, an “alligator spread” refers to a spread which includes brokerage and exchange fees and commissions are so high that a trade performed using that spread will not be profitable.

Example: An investor buys stocks for 10,000 Swiss francs and sells those same stocks for 11,000 francs. Because of the nature of the transaction, the brokerage and exchange fees and charges for the exchange come to 1000 francs, so the investor does not make a profit.

More on this topic:
Swiss online broker comparison
How to buy stocks: best trading tips
Stock trading: common pitfalls

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.

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