Fence

A Fence has the same profit profile as a Bear Spread, but unlike a Bear Spread (which doesn’t include a position in the underlying stock), the Fence is typically used to protect profits in a pre-existing short stock position (purple) by bracketing the short stock position with a short out-of-the-money put (red) and a long out-of-the-money call (green). While losses are limited, further profits are similarly capped.