Oil jumped more than 4% today. WTI through $90 for the first time since July, Brent at $94, on serious US-Iran escalation.
First, perspective. This is a conflict with real people in the middle of it. If your first instinct was to hunt for a trade, it's worth noticing that instinct.
Now the risk question, because it's a different one than most people are asking. It's not "how high does oil go?" It's "what does my portfolio quietly assume about oil staying calm?"
Airlines, shippers, anything consumer-facing assumes cheap fuel. Long-duration tech assumes inflation stays tame and the Fed stays patient — and a 4% oil day pushes the other way on both. Even your crypto exposure sits downstream of the same rates math. Positions that looked unrelated last week can all catch the same wave this week.
Principle: geopolitical risk is the kind you cannot size after it starts. Spikes like this arrive overnight, gap through stop losses, and don't wait for your risk review. The only protection that works is the sizing you already had on before the headline.
One thing to do today: assume oil stays elevated for a month and reread your positions with that lens. Anything that becomes a problem under that assumption was already too big. #risk #sizing
First, perspective. This is a conflict with real people in the middle of it. If your first instinct was to hunt for a trade, it's worth noticing that instinct.
Now the risk question, because it's a different one than most people are asking. It's not "how high does oil go?" It's "what does my portfolio quietly assume about oil staying calm?"
Airlines, shippers, anything consumer-facing assumes cheap fuel. Long-duration tech assumes inflation stays tame and the Fed stays patient — and a 4% oil day pushes the other way on both. Even your crypto exposure sits downstream of the same rates math. Positions that looked unrelated last week can all catch the same wave this week.
Principle: geopolitical risk is the kind you cannot size after it starts. Spikes like this arrive overnight, gap through stop losses, and don't wait for your risk review. The only protection that works is the sizing you already had on before the headline.
One thing to do today: assume oil stays elevated for a month and reread your positions with that lens. Anything that becomes a problem under that assumption was already too big. #risk #sizing
