Risk-Off Playbook: Positioning for the Selloff
The S&P 500 closed Friday at 6,506 after shedding 1.5% in a session that saw volume hit 138 million shares on SPY alone — 66% above the 90-day average. The Russell 2000 dropped 2.2% into correction territory. Three consecutive weekly declines, a VIX that touched 29.5 earlier this month, and crude oil screaming toward $100 per barrel: this is no garden-variety pullback. The Iran war has metastasised from a geopolitical headline into a genuine supply shock. Iran's [closure of the Strait of Hormuz](/posts/2026-03-01/news-iran-oil-supply-disruption-risk-surges-as-operation-epic-fury-threatens-strait-of-hormuz-what-it-means-for-energy-prices-and-markets) has bottlenecked roughly 20% of global oil supply, pushing WTI crude to $98.23 and Brent above $108. Hedge funds just posted their worst drawdowns since the Liberation Day tariff chaos. The question for portfolio managers is no longer whether to go defensive — it's how aggressively. Here's the risk-off playbook: what to own, what to dump, and where the opportunities hide inside the wreckage.