fence

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Related to fenced: fence out, ring fenced

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 ?
A dog who is frequently left alone in a fenced yard decides it's his responsibility to be on sentry duty, and to let you know when something's afoot.
The size of a fence depends on the size of the field that's fenced in, and the size of the rear of the wise man who sits on it.
Likewise, two adjoining fields can be fenced more cheaply than two separate fields of the same size, because one portion of the fence answers for both fields.