Should I adjust position size before BoC Monetary Policy Report?

Before the Bank of Canada Monetary Policy Report, reduce your SPX iron condor position size by 40-60 percent.

VIX is typically elevated or rising into BoC announcements, which widens expected move and increases tail risk. The ALVH methodology flags this period as elevated regime risk because implied volatility often misprices the actual path of CAD and equity reaction. Smaller size protects margin and allows you to stay in the trade without early forced exits.

Keep your normal wing width (usually 40-50 points on SPX) but trade fewer contracts. This maintains the same risk-reward profile per condor while cutting portfolio delta and gamma exposure. After the announcement and once VIX settles, you can scale back to full size using the same ALVH rules.

Rule of thumb: if VIX is above 18 heading into the report, cut size at least in half. Enter or add only after the initial volatility crush and clear directional resolution. This keeps drawdowns manageable and preserves dry powder for higher-probability setups post-event.