Iran fires a missile. Gas prices climb. The shooting stops. Gas prices stay high. Asymmetry means you get f*cked on the way up and f*cked on the way down. Welcome to derivatives pricing for people who thought Robinhood was a good app.
The Strait of Hormuz closes for three days and every mouth-breather with a Schwab account thinks he's Warren Buffett because he bought XLE at the top. Then the strait reopens and he checks his portfolio expecting a victory lap. The prices don't fall. He refreshes. Still high. He googles "why won't gas go down." He finds a Reuters article with the word asymmetry in it. He closes the tab.
Asymmetry is not a trading strategy. It's what happens when supply chains involve choke points controlled by countries that hate you. Oil goes through a thirty-mile-wide strait. Someone threatens the strait. Prices spike. Threat ends. Prices don't care. Refineries already paid more. Distributors already locked in contracts. Gas stations already changed the signs. Nobody's racing to give you your money back.
Retail spent six months learning that geopolitical risk premiums exist. They'll spend the next six months learning those premiums don't evaporate the second CNN stops showing explosion footage. They'll call their broker. The broker will not pick up. They'll post on Reddit about market manipulation. Someone will reply with a rocket emoji. Nothing will happen.
The U.S. economy absorbs the shock by passing it directly to the guy who thought filling up his F-150 was a constitutional right. He wanted exposure to energy markets. He got it. Through his rectum. At the pump. Twice a week. For the next four months.
Somewhere in Texas a man who bought USO calls is explaining to his wife that this is actually bullish long-term while she packs a suitcase.
Photo by Saifee Art on Unsplash
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