Good morning! We are almost 2 weeks into the war and the first major casualty are not global markets (yet), but visibility. Compared to the first 2 days of the conflict, we get 1% of the info we had as probably all Middle Eastern countries implemented UAE-like restrictions on posting war content.

In our view, social media companies also comply with these governments and aid them in taking down unauthorized footage. Information warfare is also part of the game and both sides are trying to control the narrative.

Prediction markets are trying to solve for it, but be vigilant - they can also be manipulated. Price analysis needs to be more in-depth.

Iran Tracker

#1 The Ceasefire

Ceasefire chances stabilized at 48% after Trump's Monday press conference.

When we look at traders, we can see sharps either firmly on the No side, or holding a neutral portfolio across strikes while trying to profit off ceasefire rumors ie. hopium. It reflects both the lack of visibility (neutral positioning) and a tendency to see the conflict as prolonged.

#2 The Strait Of Hormuz

Visibility might have got hurt first, but the real risk is in the damage to the global economy.

Here, the prospects are rather stark. When we analyze the market along the ceasefire one, we see that they are priced identically. It's clear that traders see a ceasefire as the only way to fully resume traffic. They are pricing in 0% chance the US will be able to otherwise secure full traffic.

At the same time, oil markets started to once again show way more risk to the upside:

#3 Boots On The Ground

Chances for US forces on the ground remain flat, as we continue to hear they might be necessary to ensure American victory.

This market cannot go any higher, unless we see a dramatic fall in ceasefire chances. But ultimately, one of them would need to give. Flat price on yet another market strengthens the claim that traders are waiting for a breakthrough - either a military one or a political one.

And at this point we can be pretty sure it won't be these guys:

#4 Iranian Regime Fall

Surprisingly a similar pattern is visible on Iran regime fall market.

Here, even bullish news on the regime resilience didn't impact the price. The reason is simple - the US is fully capable of toppling this regime and if this war continues they will achieve it eventually. Thus this market is also dependent on the consensus view on the ceasefire.

For now there is more uncertainty than anything, but pretty soon it must change.

#5 Next Supreme Leader

Mojtaba Khamenei continues to have better chances of survival as the Supreme Leader than the regime for some reason, but we can't have 100% efficient markets.

However, it does indicate that the market believes he will be protected and not as easily targeted. Especially since we learned he is seriously injured. It's probably safe to assume that IRGC is still running the show. And it should mean more escalation based on what we saw in the last 2 weeks.

Wrap up

Situation remains extremely volatile so make sure to follow the markets live to get fresh information on the conflict. See you tomorrow for another Morning Brief!

This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.