Most golfers believe that stakes define the edge of a penalty area unless there is a line. While lines would always DEFINE the edge of a penalty area stakes normally only INDICATE there is a penalty area (unless the local rules state that stakes DEFINE penalty areas). The default position is that penalty areas are defined by their natural boundaries – normally the break in slope.
If stakes do DEFINE the penalty areas, then it is the straight line between the outside points of the stakes at ground level that define the edge. However, if there is an area outside this definition which is obviously part of the penalty area, then that is deemed to be part of that penalty area. (You might otherwise need a large number of stakes to define an irregularly shaped area.
Also, any body of water on the course is a Penalty Area, whether or not it has been marked up as such. (If it hasn’t been marked, treat it as a Red Penalty Area).
Your ball is in the penalty area if any part of it is inside the penalty area. If another part of your ball is in a bunker or on the green, the ball is treated as being in the penalty area and not in any other area of the course.
Ideally, every penalty area would have a line around it to avoid confusion, but maintaining this for 52 weeks a year is too costly for most clubs – lines would need to be repainted almost every time the grass is cut.