Every StaxInvesting article tagged defined risk · 3 posts.
3 articles
When a binary event's outcome is already heavily priced, the expected move on the base case is small and the move on the surprise is large, the reverse of a coin flip. How sizing, defined-risk, and schedule controls position for the tail across an event with more than one point of surprise, and the honest limit of each.
When a make-or-break scheduled print drops into a tape that is already stressed, crude over $100, yields at new highs, a multi-day slide, the question is not whether the VIX is cheap but how much exposure to carry. How defined-risk sizing, schedule controls, and loss limits bound it, and the honest limit of each.
A low VIX ahead of a binary event does not mean the event is low-risk: it means options are pricing a small move against a catalyst that can produce a large one. How sizing, defined-risk structures, and loss limits bound that gap, and the honest limit of each.
