Traders trust the US-Iran truce for October, doubt it after

A US strike on Iran looks unlikely this month but more likely than not by year's end

In one line: No US air or missile strike hits Iran before 31 October, an outcome the 72% price still underrates.

Polymarket traders lifted the odds that the US-Iran ceasefire lasts through October from 56% on 1 October to 72% on 8 October, a gain of 16 points over the seven days. The contract peaked at 76% on 7 October and has since given back 4 points, 3.0 of them in the last 24 hours.

The contract asks one narrow question. It pays Yes unless the United States launches an air strike or a surface-to-surface missile strike that directly hits Iran before 11:59pm Iran Standard Time on 31 October. Strikes the United States did not start do not count.

The other dates in the event show where traders place the danger. Contracts for 9, 12 and 15 October trade at 97%, 94% and 91%. The 31 October contract sits at 72%, the 30 November one at 42% and the 31 December one at 34%. Traders expect a quiet fortnight, then rising risk, with a US strike more likely than not by the end of November.

The week's evidence runs one way. Confidence in the truce climbed 16 points, and the 4-point dip since 7 October is small beside that rise. Oil fell with it: USO, the oil fund, lost 1.58% on 7 October, the day the contract peaked. Iran is a large oil producer, so fewer expected US strikes mean less risk to supply. The evidence is thin, one week of prices, but it points to a truce gaining strength.

The United States will not strike Iran before 31 October, and 72% underrates that. The near dates sit above 90% and the week's trend favours the truce. The best case against is the November and December prices, which show traders expect the truce to fail within months; that case would gain ground if the 15 October contract fell well below 91%. A reported US air or missile strike landing in Iran before 11:59pm Iran time on 31 October, or the contract falling below 60% by 20 October, would prove this call wrong. A truce through October spares oil, and anyone holding USO, the shock of a US strike on Iran.