Traders send Iran-Arab strike contract to 100% after its window shut

The September contract jumped 96 points from its deadline-day low, with resolution due by 31 October.

In one line: The venue will find an Iranian strike on a listed Arab state inside the September window and pay Yes by 31 October; 100% overstates the certainty of a Yes ruling.

Polymarket's contract on whether Iran will target an Arab country by 30 September stood at 100% on 5 October, after its window had closed. It traded at 30% on 28 September and fell to 4% on 30 September, the last day of the window. Most of the climb came in the last 24 hours, 73.5 points by Polymarket's own figure as of 5 October.

The contract pays Yes "if Iran targets an Arab country through a qualifying military action between market creation and the listed date, Arabia Standard Time." Twenty-one states count, among them Saudi Arabia, Qatar, the United Arab Emirates, Iraq and Lebanon. Over the 7 days the price rose 70 points, and it gained 96 points from its low on 30 September. The contract resolves on 31 October, 26 days from now.

The timing decides this contract. Because the window shut with the price at 4%, a rise after it can only pay if the venue counts an action that took place on or before 30 September in Arabia Standard Time. That is the part of the rule still open: the venue has not ruled that such an action fell inside the window, and its full definition of a qualifying action, cut short in the rule as excerpted, will settle the matter. Traders price in a Yes ruling on that point. USO, the oil fund, rose 2.65% on Friday 2 October, consistent with a threat to Gulf supply, though no reporting links the two.

The call is that Iran did target a listed Arab state on or before 30 September, and that Polymarket will resolve Yes by 31 October. Even so, 100% is too high, because the same book stood at 4% on deadline day, and that gap shows the whole question turns on whether the venue dates the action on or before 30 September, Arabia Standard Time. The best case against is that the action traders are pricing fell after 30 September in Arabia Standard Time, in which case the rule pays No however clear the attack. A No resolution by 31 October would prove the call wrong.