Dynamic Volatility Strategy Framework

Managing risk across different market conditions requires adapting your approach based on realized vs implied volatility. A dynamic strategy bucket adjusts position sizing and hedging intensity when price swings accelerate.

Key mechanics:
• Scale exposure down during volatility spikes to protect capital
• Rebalance entry points when volatility compression occurs
• Use volatility clustering patterns to time entries/exits
• Implement tiered stop-losses aligned with current vol regime

This framework helps traders avoid overleveraging in choppy markets while capitalizing on directional moves when volatility normalizes. Works across spot, futures, and options markets.