Should I adjust position size before S&P 500, Dow tick lower as US-Iran tensions unsettle investors - Reuters?

With US-Iran tensions driving implied volatility higher, reduce your iron condor position size immediately by 40-60% from normal levels. Current VIX above 20 signals elevated tail risk that expands the distribution of potential SPX moves, making standard wing-width condors far more vulnerable to breach.

Under the ALVH methodology, when VIX exceeds 18-20 you must shrink size first before widening wings. A typical 10-15 delta iron condor that normally risks 1-2% of capital should be cut to 0.5-0.8% per trade until the geopolitical premium decays. This preserves dry powder and prevents one accelerated downside move from damaging your account.

Maintain at least 45-55 points of wing width on the SPX to absorb the increased volatility of the event. Avoid initiating new full-size condors while VIX remains elevated. Once tensions ease and VIX drops below 17, you can scale size back up. Current market conditions demand defensive risk management over yield chasing.