Good morning! Today marks the 21st day of the special military combat operation in Iran. We have news of additional marine units being deployed to the theater, joining from the west coast with an ETA around end of April.
Not only a sign of conflict escalating, but also a real possibility of US boots on the ground. Neither has been overlooked by prediction markets traders as market reality starts to match on the ground reality.
Iran Tracker
#1 The Ceasefire
Ceasefire chances continue to drop across all strikes. With additional deployments and ever-strong rhetoric on both sides it is hardly a shocker.
Additionally, the market no longer reacts to bullish messaging from both Trump administration and Netanyahu. Despite the latter's claim. that the war will end soon, the prices hardly moved. For us it indicates that the market is no longer hooked on hopium and is much more realistic about the current situation.
#2 The Strait Of Hormuz
The Strait of Hormuz continues to be effectively closed as Iranians introduce an option for transit for friendly ships.
The chances to see over 20 ships passing the strait in a single day sustained its drop below 20% as chances of an escort operation this month decreased to a new low of 18%:
An April escort operation is also doubtful with only 45% chances. In the meantime WTI prices continue to defy global markets and reality on the ground, staying between $90 and $100:
#3 Boots On The Ground
The market on US boots on the ground in Iran rose, indicating 68% chance by the end of the year and 56% chance by the end of April!
News on additional deployment had a major influence, but on the back of it there is a realization that this special operation cannot succeed without committing soldiers. Especially if one is aiming to invade Kharg Island for leverage:
#4 Iranian Regime Fall
In the meantime the Iranian regime continues to show resilience and chances of its fall dropped to 38%.
Even amid IRGC spokesman assassination, traders are now fully aware the regime is more than its people, fully institutionalized and in control of the country. The pricing on this market must be in part based on chances of wide military operation on the ground, be it Israelis, Americans or the Kurds:
#5 Next Supreme Leader
Lastly, all these new developments had little impact on Mojtaba Khamenei's chances of staying as the Supreme Leader of Iran.
News about him died out after his initial statement, however we can expect to hear from him from time to time, as fuel for Iranian war propaganda.
Wrap up
Situation remains extremely volatile, however it is starting to become clear that we are in for longer. Prediction markets have almost fully priced in a prolonged conflict, now we are waiting for traditional markets to reflect that reality. You should also start to think on how a global energy supply shock affects your job, family and country as we can see the first impact on the war already. Per what we see on the markets, we are entering uncharted waters, full of chaos and uncertainty.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and 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.