a water hazard which has been marked with red stakes or line. Indicates that a drop can be made at the point at which the ball crossed the hazard line (with 2 club lengths relief). Similar to any lateral hazard (such as trees or fence line) which also would be marked by red stakes.
The reason the rules differentiate a "lateral water hazard" from a "water hazard" is that in the case of a lateral water hazard, the option to drop behind the hazard does not exist. Because the lateral water hazard runs along the side of the playing area, not across it. The official definition of "lateral water hazard" is a water hazard situated so that it is impossible or impractical (in view of the committee) to drop behind it - as you would do with a normal water hazard.
A water hazard that runs parallel to a hole or green.
A water hazard which generally lies in the same direction as the hole - such as a ditch or stream alongside a fairway. Usually denoted by red stakes or lines.
A ditch, stream, or pond roughly parallel to the line of the hole. A ball picked out may be played from either side, with a one-stroke penalty.
Type of water hazard defined by red boundary stakes. Often runs parallel to the line of play on a hole. The penalty for hitting into a lateral hazard is one stroke.
A water hazard which runs parallel to the fairway. Marked with Red Stakes
A "lateral water hazard" is a water hazard or that part of a water hazard so situated that it is not possible or is deemed by the Committee to be impracticable to drop a ball behind the water hazard in accordance with Rule 26-1b. That part of the water hazard to be played as lateral water hazard should be distinctively marked. Note: Lateral water hazards should be defined by red stakes or lines.