Conflict Hedge
Calculator

When Russia invaded Ukraine in February 2022, the S&P 500 dropped 12.4% in six weeks. The 2003 Iraq War wiped 14.7% before the market recovered. These aren't tail risks — they're recurring events that catch equity holders fully exposed because traditional hedging tools don't price geopolitical scenarios.

Prediction markets do. Kalshi lists binary contracts on specific conflict scenarios — if you buy a YES contract at 12¢ and the event occurs, you collect $1. That's a 7× payout on a scenario that could simultaneously crush your equity portfolio 20–30%. The math works. The problem is knowing how many contracts to buy.

That's what this calculator solves. Different sectors have different conflict betas — tech and energy get hit harder than consumer staples; defense stocks often riseduring war (which is why selecting Defense returns a $0 hedge: you're already long the chaos). The tool applies historical sector betas, estimates your drawdown, and back-calculates the contract count needed to cover it.

The WW3 scenario numbers look absurd.They're meant to. At 4¢ contracts covering a 45% drawdown, a $100K tech portfolio would theoretically need $60K in contracts — and the quote is right that at that point, your prediction market payout is the least of your problems. But the regional conflict and major war scenarios? Those are real hedges real traders run.