Trade Alert: Hedging Iran War Risk
Taking advantage of today's drop in volatility
Time To Hedge Iran War Risk
Over the last few weeks, the Iran situation has gone from background noise to a live geopolitical risk. The U.S. has already surged one carrier strike group led by the USS Abraham Lincoln into the region, and a second group built around the USS Gerald R. Ford is now crossing the Atlantic toward the Strait of Gibraltar to join it. Together, that’s a lot of floating firepower parked within reach of Iran.
At the same time, the U.S. has moved dozens of advanced combat aircraft—including F-22s, F-35s, and F-16s—toward the Middle East, along with aerial refueling tankers and additional missile defense systems. That combination of carriers, fighters, tankers, and missile defenses is exactly what you’d assemble if you wanted the option to launch and sustain strikes against Iran’s military and infrastructure, and still have enough coverage to manage retaliation in the Gulf and around key shipping lanes.
Meanwhile, Tehran has been conducting missile and naval drills near the Strait of Hormuz and has stepped up its own signaling, while the Pentagon keeps emphasizing that “all options are on the table.” In other words: diplomacy is ongoing, but both sides are clearly positioning for the possibility that talks fail and things go kinetic.
Volatility, however, pulled back today rather than spiking, which is exactly the kind of window when it makes more sense to pay for protection—before the next headline hits the tape—than to scramble after everyone else suddenly decides they need a hedge too.
In the paid section below, I’ll walk through a dedicated volatility hedge built on VIX options, sized so that a sharp vol spike on Iran headlines can meaningfully offset damage elsewhere in the book without tying up a lot of capital.
Today’s Iran War Hedge
Geopolitical risk / volatility hedge theme
