pre-election algo adjustments - sizing down, hedges up

election tuesday.

time to adjust.

the problem

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elections = regime uncertainty.

policies change. sectors rotate. vol spikes.

binary outcome. impossible to predict.

my adjustments

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1. position sizing cut 40%

normal max position: 2% of account

election week: 1.2% max

reducing exposure to unpredictable outcomes.

2. no new positions election day

algos will monitor but not trade.

too much noise. slippage increases.

3. hedges in place

VIX calls: 5% of portfolio

SPY puts: 3% of portfolio (OTM, cheap insurance)

4. profit targets tightened

normal: 80% of max profit

election week: 60% of max profit

take money faster, reduce time exposure.

code adjustments

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class ElectionModeRiskManager:
    def __init__(self,
                 normal_max_position: float = 0.02,
                 election_reduction: float = 0.40,
                 profit_target_normal: float = 0.80,
                 profit_target_election: float = 0.60):
        self.normal_max_position = normal_max_position
        self.election_reduction = election_reduction
        self.profit_target_normal = profit_target_normal
        self.profit_target_election = profit_target_election
        self.election_mode = False

    def set_election_mode(self, active: bool):
        self.election_mode = active

    def get_max_position_size(self, account_value: float) -> float:
        base_size = account_value * self.normal_max_position
        if self.election_mode:
            return base_size * (1 - self.election_reduction)
        return base_size

    def get_profit_target(self) -> float:
        if self.election_mode:
            return self.profit_target_election
        return self.profit_target_normal

    def should_trade(self, is_election_day: bool) -> bool:
        if is_election_day:
            return False  # no new positions
        return True

historical context

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2020 election:

VIX peaked at 40

post-election rally once outcome clear

2016 election:

overnight futures limit down

next day rally

pattern: uncertainty before, resolution rally after

my plan

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monday (oct 28): reduce positions, add hedges

tuesday (nov 5): no trading, watch

wednesday (nov 6): assess outcome, potentially add

thursday-friday: return to normal if clear winner

if contested: stay defensive through weekend.

2:38am wednesday. pre-election algo adjustments. position sizing -40%, no election day trading, hedges added (VIX calls + SPY puts), profit targets tightened (80% → 60%). historical pattern: uncertainty before, rally after resolution. staying defensive until outcome clear.

-AK