Should I adjust position size before Most Strait of Hormuz shipping at a standstill despite latest US pledge - Reuters?

With oil shipping through the Strait of Hormuz at a standstill, implied volatility is likely to rise sharply and push VIX higher. For SPX iron condor traders this means wider expected daily ranges and increased risk of the short strikes being tested.

Do not increase position size. Reduce it by 30-50 percent immediately or stand aside until the situation clarifies. Higher VIX levels compress your edge on the iron condor because the credit received no longer adequately compensates for the expanded wing risk. Under the ALVH methodology, when VIX is rising rapidly you tighten wing width to 1.5-2 times expected move instead of the normal 2.5-3 times and you cut size to keep defined risk per trade under 1 percent of portfolio equity.

Monitor VIX futures term structure. If contango collapses and the front month spikes above 22-23, exit or roll the condor to wider strikes and shorter duration. Preserve capital first. Only restore full size once VIX stabilizes and the shipping news is priced in. Smaller size plus tighter wings is the disciplined response right now.