How the contract works
Probability
How the price has moved
Analysis
Context
What moves the probability
Narrow resolution window
The ceasefire only needs to hold a few more days, through 12 October 2026, which limits the time available for a new triggering event to emerge. Short windows generally push prices toward their terminal value absent new news, which supports a high Yes price here.
High bar for a qualifying strike
Only a direct US air strike, surface-to-surface missile strike, or one-way drone strike against Iranian territory counts as a ceasefire break. Naval incidents, cyber operations, and rhetoric are excluded, which narrows the set of events that could move this market to No.
Regional proxy activity
Iran-aligned groups across the region remain active, and any escalation involving them could pressure Washington toward a response. This is a background risk that keeps the price below full certainty even without a specific reported incident.
Political cost of renewed strikes
Launching a new strike on Iran carries diplomatic and domestic political costs for the US administration, which lowers the likelihood of unprovoked escalation in a short window. This factor supports the ceasefire holding absent a clear provocation.
The case for
- The ceasefire has held since military action between the US and Iran paused earlier in 2026, and no qualifying strike has been reported since.
- The resolution window is short, closing on 12 October 2026, which leaves limited time for a new strike to be launched and reported.
- The resolution criteria exclude naval incidents, cyber operations, and rhetoric, narrowing the paths to a No outcome to an actual air or missile strike.
- Renewed US strikes carry political and diplomatic costs that make unprovoked escalation less likely absent a specific trigger.
The case against
- Ceasefires in this region have broken on short notice before, often following a single incident rather than a visible buildup.
- Proxy activity by Iran-aligned groups could prompt a US response that would qualify as a strike under the resolution rules.
- A new intelligence assessment or incident in the final days before the deadline could change US calculations quickly.
- The market price, while high, is not certainty, and the small remaining probability reflects genuine residual risk rather than noise.
What to watch
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