Fence

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Dictionary Says

Definition of 'Fence'

A risk-mitigating investment strategy that utilizes options to limit the possible range of returns. To employ a fence, the investor purchases a security (a long position), a long put with a strike price near the spot price of the security, a short put with a strike price lower than the spot price of the security and a short call with a strike price higher than the spot price of the security. The options are typically set to expire at the same time. The option premiums should balance each other, having a net derivative investment of zero while the underlying security is bought.

Investopedia Says

Investopedia explains 'Fence'

A fence is used to limit the movement of an option investment return, just as a fence used on a farm is designed to keep animals from wandering outside of a property. An investor may employ a fence if the underlying security has increased in value, since employing a fence will reduce the risk of loss. When the options employed expire, the strategy is designed to keep the value of the investment between the strike prices of the short call and long put.

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'Fence'

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    http://www.investopedia.com/articles/mortgages-real-estate/10/new-home-repairs.asp
    ... 1. Fencing Maybe a few bricks have fallen out in a portion of your brick fence
    or there are a few warped planks. Seems like no big deal, right? ...

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    ... The signal is issued contrary to the balance of advisory opinion. The Press
    By their very nature, financial journalists are fence sitters. ...

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    ... I remember when our house in South Florida needed a new fence a few years
    ago. ... I certainly did after our experience with the fence guy. ...

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    ... Likewise, if you plant bean, lettuce and other plants that critters and insects
    like to eat, you'll need a fence, maybe some repellent and some insect spray. ...

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    ... This isn’ta reason by itself to buy a home, but if you’re on the fence
    and you can get the deal done, it’s decision time. ...

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    ... Third, banks with both retail and investment banking operations put up a "ring fence"
    around retail operations in order to isolate domestic customers from a ...

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    ... While some of this is no doubt seasonal, much of it could also be attributed to
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  • 4 Reasons To Buy Tech Stocks

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    ... Doesn't Matter It's kind of funny how almost every sector falls on different sides
    of the fence when debating whether it's inflation or deflation that's looming ...

  • Skechers' Toning Footwear A Fraud?

    http://stocks.investopedia.com/stock-analysis/2011/Skechers-May-Be-Making-Sketchy-Claims-SKX-NKE-CROX-WWW1004.aspx
    ... be enhanced by the ruling. Consumers on the fence now have greater cause
    not to make that purchase. Additionally, an even bigger ...

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    There's a debate over which policy is better for the economy.
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