Traders trim ceasefire odds after Trump spurns Iran's Hormuz offer
The September 30 contract slipped from a 95% high, but traders still expect no US strike on Iran.
In one line: No US air or missile strike hits Iran before 30 September. Trump's rebuff of Tehran's Hormuz offer is diplomacy, and the 86% price is too low.
President Donald Trump rejected Iran's offer to reopen the Strait of Hormuz within a week if America met certain conditions, abc7 and the Richmond News reported on 26 Sep. The rebuff closes one route to a deal. It is a diplomatic refusal, and the Polymarket contract on the US-Iran ceasefire through 30 Sep turns on military action alone.
Traders put the chance of the ceasefire holding to that date at 86%. Over the 7 days the price rose 10 points, from 76% on 20 Sep. It peaked at 95% on 26 Sep, the day of the rebuff, and has fallen 9 points since that high, and is down 3.0 points in the last 24 hours. Later dates in the same event are far less sure: 50% for 31 Oct, 35% for 30 Nov and 34% for 31 Dec.
The resolution rule decides what the rebuff means. The contract pays No only if the US launches "an air strike or a surface-to-surface missile strike" that "directly impacts Iran" by 11:59pm Iran Standard Time on 30 Sep. A rejected offer is not a strike. Traders cut the odds on the news, which is fair, since a refused offer leaves fewer ways out. The drop from 86% for 30 Sep to 50% for 31 Oct shows traders see the danger as coming after this week's deadline. The Hormuz agreement contract for 30 Sep stands at 4%, so few traders expected a deal this week anyway.
The call: the US does not strike Iran before the deadline, and the 86% price underrates that. The call is wrong if any outlet reports a US air or missile strike landing in Iran before 11:59pm Iran Standard Time on 30 Sep.