Should I adjust position size before BoC Interest Rate Decision?

Before the BoC interest rate decision, reduce your iron condor position size by 40-60%.

SPX reacts sharply to Canadian rate surprises, especially when they diverge from Fed expectations. This creates wider intraday moves that can test your short strikes even if the overall trend stays range-bound. With VIX currently in the 13-15 zone, implied volatility is low and will likely expand on any surprise, increasing gamma risk on your short legs.

Apply the ALVH methodology here: keep your Average Loss per Vehicle under 0.8% of total portfolio risk. If your current condors are sized at 2% portfolio risk per trade, cut that exposure in half before the announcement. This preserves dry powder for post-decision setups when the VIX spike often gives better credit-to-wing-width ratios.

Manage wing width conservatively at 45-55 points on the SPX. Tighter wings increase the probability of early adjustment and eat into the risk-defined nature of the trade during high-impact events. Enter or adjust positions at least 24 hours before the BoC release to avoid the pre-announcement volatility contraction that distorts pricing.

After the decision, reassess VIX levels and expand size only if the move has already occurred and the new volatility environment fits your ALVH parameters.