Tuesday, February 28, 2012

Alligator Spread

Financial wikis define an alligator spread as a complex options position where the commissions eat you alive. Below is a little whimsy from this morning's Quick Takes Pro newsletter.

But it is a bit more serious if we look at the analysis and not our scaly skinned pal, which, by the way, is oh so tasty in a remoulade.

What I see here is rising prices (it's the spyder ETF) and falling volume. You can decide what it means but rallies need fuel and volume is fuel.

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