Macro event recovery protocol checklist

The first trade setup is not your full workflow. Build the workflow around three phases:

Most teams break down at phase two and wait for phase three to happen automatically. Recovery is not automatic. It is a routine with fixed checks.

Set a strict recovery timer before entering:

This prevents the common trap of “we will decide later.”

• pre-event readiness
• event reaction execution
• post-event recovery
• when recovery begins (for example, +3 minutes after release or after first print normalization)
• when it ends (for example, the first normal-depth window closes)
• who does what if recovery conditions are not met

You need a new baseline before deciding to keep size, rotate, or close.

Capture:

Do not trust the old baseline from pre-release. Macro events can invalidate it within seconds.

If spread, depth, and IV all change but in different directions, use the least favorable condition for recovery decisions. Recovery is about survivability, not best-case outcomes.

• spread and depth on the current chain
• implied volatility level by strike
• time-to-expiry liquidity drift
• account constraints against margin and assignment surprises

Before adding size, keep, or adding hedge, run triage in order.

1) **Execution viability** - Can you move now at the posted spread? - Can you rehedge without pushing spread beyond the pre-set shock line? - Is routing still accepting order changes?

2) **Thesis relevance** - Did the new print still support your directional assumption? - Did it just change timing without changing direction? - Is the thesis still true after adjusting for the new IV regime?

3) **Loss geometry** - If spread normalizes slowly, is current risk still inside budget? - If not, what is the minimum risk geometry that keeps exposure controllable?

If any step fails, recovery action is mandatory. Recovery action is not optional.

Binary choices cause delay. A ladder gives order.

Document the ladder thresholds once, in numbers, and execute them consistently.

If you need a visual, think:

Each transition has a hard trigger, not mood-based timing.

• if depth is weak but thesis still valid, reduce size and wait at a lower-risk layer
• if thesis is weak but spread is still reasonable, close and postpone
• if spread and thesis both fail, reset to neutral and liquidate selected legs first
• current risk layer -> next lower layer -> fully safe layer

The protocol is complete only when these are true:

If any of these fail, keep the position in reduced or flat recovery state.

Recovery is not a weakness. It is the mechanism that turns high-volatility moments into repeatable opportunities.

• spread and depth are back inside the pre-event operating window
• loss geometry is within your original plan
• thesis and account state are both aligned again
• re-entry rules are still valid after execution history