Should I adjust position size before Deposit Facility Rate?
VixShield Answer
Before the ECB Deposit Facility Rate decision, reduce your SPX iron condor position size by 40-60 percent.
Higher VIX levels typically accompany these events and directly widen expected move, which compresses your probability of profit and increases tail risk on both wings. The ALVH methodology flags these periods as elevated-volatility windows where standard wing-width management becomes less effective because implied volatility crush after the announcement can distort delta behavior.
Smaller size protects margin and buying power while still allowing you to stay in the trade. Keep your wing width at 25-30 points on the SPX to maintain adequate cushion. Once the rate decision passes and VIX settles, you can scale back to full size using the same ALVH rules.
Do not increase size ahead of the announcement. The short-term VIX spike almost always outweighs any theta collected in the first 24-48 hours. Position-size discipline before scheduled events is one of the highest-edge adjustments you can make in iron condor trading.
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