An advisor to Iran’s Ghalibaf has warned Trump of escalation unless he surrenders within 20 hours. The odds of a US-Iran ceasefire by April 7 have fallen to 1% YES, down from 2% yesterday.
Traders are reacting to the threat of military escalation. The April 15 market shows a slight drop to 6% YES, while the April 30 market is at 18% YES, down from 24% a day ago. The May 31 odds saw the steepest decline, falling to 36% from 46%.
Liquidity in these markets is notable, with the April 7 market trading $22,948 in USDC daily. It takes just $12,367 to shift the odds by 5 points, showing vulnerability to large trades. The June 30 and December 31 markets remain stable at 51.5% and 68.5% YES, reflecting longer-term expectations.
The ultimatum’s impact depends on whether Iran’s proxies act. The market’s quick response shows traders’ sensitivity to potential escalation. A proxy attack would severely impact ceasefire probabilities. At 1¢, a YES share for an April 7 ceasefire would pay $1 if resolved, but it requires believing in rapid diplomacy.
Watch for statements from CENTCOM and actions by Iranian proxies like the Houthis. Any move beyond rhetoric could further lower ceasefire odds.
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