fence

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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 ?
Ted Thurgood, of the Residents Action Group (RAG) which has been fighting the proposals, said Western Power Distribution was fencing off the Lisvane Reservoir area so it could show the CCW it was committed to protecting the rare waxcap mushrooms on the site.
Schemes ranged from restoring hedgerows to controlling coastal marshlands, managing heathlands and fencing off river corridors.
His grieving wife said: "They have got to do something about fencing off that pool.
Hopefully, fencing off the quay will make the area a lot less attractive to them.