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Outcomes
Market
Price
AI Fair
Value
Value
Edge
2% Gain
YesNo
3% Gain
YesNo
3% Loss
YesNo
4% Gain
YesNo
5% Loss
YesNo
4% Loss
YesNo
5% Gain
YesNo
AI Insights:
03.17 11:40 UpdatedFair Value Reasoning:
Although the market rebounded on March 16-17 and panic subsided (VIX dropped from 27.5 to 23.5), the current volatility level still implies a daily move of around 1.5%. With ~10 trading days remaining and the major catalyst of the FOMC decision on March 18, the statistical probability of a single 2% move remains very high (>65%). The current price of '2% Gain' (49c) is an overreaction, mistakenly pricing a short-term stabilization as a permanent drop in volatility. Conversely, the crash in '3% Loss' pricing is a rational mean reversion, but given unresolved geopolitical risks (Iran/Hormuz), tail risks still warrant a premium.
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Hedging
US 10Y Yield
Nasdaq 100
S&P 500
This prediction market directly corresponds to extreme single-day volatility in the S&P 500. If the market resolves to 'Yes' (e.g., a 4% or 5% daily move occurs), it implies a structural crash or melt-up in US equities (Score 5), leading to a massive repricing of global assets. This market serves as a direct hedge for volatility, similar to the VIX.
Movers
March 14, 2026 - March 17, 2026, the price of '3% Loss' plummeted from 47.5c to 25c, and '4% Loss' fell from 24.5c to 13c. This was driven by a significant cooling of panic regarding the Middle East situation, with oil prices retreating from above $100 and US equities staging a 1% technical rebound on March 16, causing the premiums on previously overheated bearish bets to collapse.
March 14, 2026 - March 17, 2026, the price of '3% Gain' dropped from 20.5c to 15.5c, reflecting that while the market anticipates a rebound, the probability of an extreme 3% single-day reversal is seen as diminishing in favor of more moderate price action.
Divergence
Significant divergence exists. Polymarket prices '2% Gain' at 49c (~50% probability), which contradicts basic volatility models. With VIX > 23, implied daily volatility is ~1.5%, meaning a 2% daily gain requires only ~1.3 standard deviations. Given the remaining 10 days include major events like the FOMC decision, the cumulative probability should be closer to 70%. The market is currently suffering from recency bias due to the relative 'calm' of the last two days.
