War Room

Shock Types, Presets & Playbooks

The distance between “we should think about that risk” and a number you can act on comes down to two things: knowing which shock to stage, and knowing what to do with what comes back. Every War Room scenario is composed from the same six shock building blocks. You can start from a curated preset, change any number in it, or layer several shocks into a compound crisis of your own design. This page catalogues the building blocks and the preset library, then walks two complete playbooks end to end — one in procurement money terms, one as a trader's pair-trade stress test.

The six shock types

Every shock, whatever its type, also carries two controls. Duration is how many months the shock keeps pressing before it fades — anything from a single month up to three years. Intensity is how fully the shock lands: at the top of the slider you are simulating the textbook event at full force, and halfway down you are simulating a half-strength version of it. Between them they let you dial a crisis up or down to match what you actually fear, which is how you find out whether your plan survives the realistic version rather than only the headline one. In the staging dialog every shock can be edited, reordered or removed, and Add shock appends another — so a single scenario can layer several events, which is how you test a compound crisis rather than a single headline.

The preset library

The landing page's preset loadouts are curated scenario cards, each with a name, a short description and tags. They are professionally tuned starting points, not fixed reports: clicking a card opens the staging dialog pre-filled, and every number inside it is editable before you commit — which is how a textbook crisis becomes your crisis in under a minute. The table below says what each preset stress-tests. The shocks, magnitudes and durations behind them are all yours to change, and changing them is the normal way to use the library rather than an advanced move.

The procurement playbook

It is Monday morning, you manage the diesel and jet-fuel budget, and the weekend headlines were about tanker traffic near a major shipping chokepoint. The question you carry into the week is simple: what would a closure do to my fuel costs? Open the chokepoint-closure preset — a three-month crude-supply embargo — and notice the key idea before you run anything: you do not buy crude, you buy the fuels refined from it. That is exactly the point of the exercise. The engine carries the shock from crude into the refined fuels the platform tracks, heating oil as the closest distillate proxy for diesel and jet fuel and gasoline alongside it, through the historical relationships it has measured between them. Review the pre-filled shock, change nothing, and run it.

1. Read two columns per fuel — On the Map tab's commodity impacts table, find each fuel you buy and read Δ Median — the most likely price change caused by the shock alone — and CVaR 95%, how deep the move typically goes if you land in the genuinely bad cases. Everything that follows is arithmetic on those two numbers.
2. Multiply the headline move by your annual spend — This is the money conversation, and it is one line of arithmetic. A low single-digit percentage move on a multi-million-euro fuel budget is a six-figure exposure — and that figure, not the percentage, is what a budget owner needs to hear. Do it per fuel and add them up.
3. Size the cushion to the bad cases, not the headline — CVaR is always at least as harsh as the median, and it is the more conservative number to plan against. If the bad cases imply a move well above the headline, the headroom conversation scales with them — that is the cushion this scenario actually demands, rather than the one the headline suggests.
4. Budget to the top edge of the shocked band — On the Markets tab, open each fuel's card and read the top edge of the shocked band rather than the median line. The median is the likely story; the top edge is the one that breaks a budget. A plan that survives the pale outer fan survives the scenario.
5. Hand the hedge ticket to whoever executes — The Strategy tab has already drafted the protection: a long leg, a short leg, the ratio between them, and entry, exit and stop levels. Treat it as a specification to hand to treasury or to whoever executes financial hedges for your organisation — pre-sized to this specific shock, and to be validated before anything is placed.
6. Adopt the tripwires, then read the warnings — Put the monitoring tripwires on your actual watchlist — they are what tell you the scenario has stopped being hypothetical. Then read the risk warnings before you walk into the budget meeting, because that is where the strategist tells you what would invalidate its own advice.
7. Let the re-run stand watch, and attach the PDF — Because you ran it, the scenario is already saved and shared with your organisation, and it is re-tested for you automatically each morning after the daily data refresh. Export the PDF and attach it to your budget memo — every content page carries the reminder that this is a simulation, not investment advice, which sets expectations for every reader you send it to.

• Stage the shock that keeps you up at night — a preset, or your own typed prompt.
• Multiply each commodity's headline move by your annual spend to see the money at stake.
• Budget to the top edge of the shocked band, not to the median.
• Hand the hedge ticket — ratio, entry, exit, stop — to whoever executes.
• Adopt the monitoring tripwires as watch items, and read the risk warnings first.
• Let the daily re-run stand watch while you get on with other work.

The trader playbook

This one starts a screen away from the War Room, on the StatArb cointegration matrix — the pair-trading screen covered in Correlations, Hedging & Statistical Arbitrage. You are hunting a stretched pair: two commodities whose prices are statistically tethered, meaning they drift apart but reliably snap back, where the spread is unusually wide right now. Scan the Z-Score column for the rows the platform flags as unusually stretched — the further the gap sits from its normal range, the more likely it is to close — and check the half-life column for a short number, since that is how fast the spread typically closes half the gap. The Signal column already names which leg to buy and which to sell.

Before you commit capital, stress-test the snap-back you are betting on. The row's War Room button creates a saved scenario containing two opposing three-month supply shocks — pushing the expensive leg further up and the cheap leg further down — sized automatically to today's stretch. What it stress-tests is the case that hurts you: the spread widening instead of converging. Unlike ordinary saved scenarios these exports stay private to you, since they encode your own trade idea. Run it, then go straight to the Map tab and ask the only question that matters for a market-neutral book: do both legs move together, or do they split? Legs moving together means the hedge holds and the spread does the work. Legs flying apart means the hedge breaks — and that divergence, not market direction, is the failure mode that wipes out market-neutral positions.

Then comes the sizing discipline. On the Markets tab, lay each leg's shocked fan against your planned entry and stop: if the band comfortably crosses your stop, either the stop is too tight or the position is too big. Size against the scenario's VaR 95% and CVaR 95% rather than against calm-market history, because those are the numbers that tell you how much of the trade a single bad week could take back. And re-run before you size up. Every run re-fetches correlations, tethered pairs, market regimes and price history at the moment it starts, so the shocked bands and the spread's normal level both move with the market — last week's run is last week's market.

• Find the stretched pair — a Z-Score the platform flags as unusually wide, with a short half-life.
• One click stages the stress test, sized to today's stretch and private to you.
• Run it and check the legs move together on the Map tab — a split is a broken hedge.
• Size to the scenario's worst-case measures, not to calm-market history.
• Re-run before you size up — the bands move with the market.