What is an alligator spread?

Alligator spread is a mocking term for an options combination of call and/or put options that cost so much commission that it becomes virtually impossible to make a profit, regardless of how the market develops, even if it moves exactly as expected.

The term refers to the way in which the transaction costs "eat up" all the profit, comparable to an alligator's appetite. This term emphasizes the risks and costs associated with complex options strategies.