This Is How Big Money Is Trading the War in Iran

In this Odd Lots episode, recorded on March 25, 2026, amid ongoing US involvement in the Iran war, hosts Joe Weisenthal and Tracy Alloway speak with Ozan Tarman, Vice Chair of Global Macro at Deutsche Bank. Tarman, who dines regularly with big-money traders worldwide, explains how professionals navigate the headline-driven volatility, positioning shifts, and fat-tail risks without overreacting to every tweet or statement.

Headline Volatility and Pain Trades

Markets react sharply to conflicting signals from Trump, Iran, and Israel—such as ceasefire rejections or unverified talks—yet futures often stay resilient. Tarman describes this as a "pain trade," where crowded positions against momentum (like short equities or long oil) hurt as rallies persist. Pre-war (late February), focus was on AI disruption and rate cuts, with US 10-year yields at 3.93% and bull flatteners popular. Post-attack, "warflation" flipped sentiment: liquidations hit winners like gold (peaked over $5,500/oz, now in 10-day sell-off) and emerging markets to raise cash for defense. "Bad volatility" emerges from constant headline swings, leading wounded traders to flatten positions—"flat is the new up"—while survivors spot opportunities, like fading skeptics on a quick "mission accomplished" resolution.