Politics|$1.4m Vol|
13 days 7 hrsKharg Island no longer under Iranian control by...? - AI Odds Analysis
All
Outcomes
Market
Price
AI Fair
Value
Value
Edge
March 31
YesNo
April 30
YesNo
AI Insights:
13 hours ago UpdatedFair Value Reasoning:
Despite the market pricing 'Yes' at 11.5c, the actual probability is negligible (<5%). First, with only 13 days remaining, transitioning from 'airstrikes' to a 'full amphibious invasion with established control' is logistically improbable without visible massive ground force mobilization. Second, US official statements and actions (Operation Epic Fury) explicitly confirmed 'deliberately sparing' oil infrastructure to avoid global economic shock, signaling a strategy of punishment and deterrence rather than territorial conquest. The rules require 'established control'; any contested or unclear status resolves to 'No', setting a very high bar for a 'Yes' outcome.
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Arbitrage|Low Risk
Arbitrage Plan:
Buy March 31 'No' (Current Price ~88.5c)
Plan Description:
This is a 'Soft Arb' or low-risk yield opportunity. While not strictly risk-free, the 11.5c price for 'Yes' vastly overestimates the likelihood of a full invasion within two weeks. Given the current US strategy of 'stand-off' airstrikes and concerns over oil prices, the probability of Kharg Island changing hands by March 31 is minimal. Buying 'No' is effectively shorting a negligible tail risk with a high annualized yield.Sign up to view more information
Arbitrage: 11¢
|Annualized yield: 364.5%
Rule Risk
The definition of 'loss of control' is strict, excluding mere sabotage, bombardment, or temporary raids. The core risk lies in the clauses regarding 'contested control' or 'unclear status resolving to No'. In the fog of war, confirming full occupation often involves significant information lag and propaganda, potentially causing market resolution to differ from perceived battlefield reality.
Exotics
While geopolitical conflict is a common topic, this specifies a particular Iranian island (Kharg Island), a critical hub for oil exports. This is a relatively niche yet strategically massive target, unlike a generic 'war breaks out' market, but not entirely inconceivable given Middle East tensions.
Hedging
Crude Oil
US 10Y Yield
Gold
S&P 500
Kharg Island handles the vast majority of Iran's oil exports (often estimated over 90%). If Iran loses control of this island, it implies a massive shock to global oil supply (interruption or blockade), causing Crude Oil prices to spike instantly. This would trigger global risk-off sentiment, boosting Gold, and likely significantly impacting equities and bond yields due to inflation expectations and geopolitical panic.
Movers
March 14, 2026 - March 17, 2026, the price of Option 'Yes' plummeted from 42c to 11.5c. The reason was a market correction after the initial panic over Trump's 'obliterated' remarks subsided. Satellite imagery and shipping data confirmed that oil exports were continuing and that US operations were limited to airstrikes rather than occupation, causing the fear premium to evaporate and the price to revert to fundamentals.
Divergence
Significant divergence exists. The prediction market implies an ~11.5% probability, suggesting a 'plausible' outcome. However, the consensus among military analysts and geopolitical experts (e.g., ISW, TankerTrackers) is that the US aim is to degrade capabilities via airstrikes to force the Strait of Hormuz open, not to conduct a high-risk amphibious invasion. Given the 13-day timeline and lack of ground force mobilization, the actual probability is likely <2%. The market price reflects an excessive hedge against 'Trump's unpredictability'.
