fence

(redirected from Wing fence)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.

Fence

A position in which an investor is long (or short) on an out-of-the-money put, long (or short) on an opposite out-of-the-money call in addition to being long (or short) on the underlying asset. Both options have the same expiration date. A fence position sets a floor and ceiling for the underlying asset and limits potential losses for the investor. It is often used by traders in farm commodities.

fence

An investment position consisting of being long (or short) a stock or commodity, being long (or short) an out-of-the-money put, and being short (or long) an out-of-the-money call. Both options have the same expiration date.
References in periodicals archive ?
It's great to wing fences but, sometimes, horses can overdo it.
European safety regulators have ordered Airbus A310 operators to check the type after at least three carriers suffered in-flight loss of wing fences.