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Outcomes
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AI Fair
Value
Value
Edge
December 31
YesNo
March 31
YesNo
AI Insights:
03.17 19:13 UpdatedFair Value Reasoning:
For 'March 31': With only 14 days remaining and active diplomatic negotiations (including the release of 51 prisoners), the likelihood of the US suddenly abandoning talks to launch a kinetic airstrike (impacting ground) is negligible; Fair Value should be at or below 1c. For 'December 31': The 37c price remains inflated. While uncertainty about the talks has created a price floor around 35c-40c, US strategy favors 'Venezuela-style' maximum pressure or a 'Friendly Takeover' (economic collapse triggering internal change) rather than airstrikes. The market continues to conflate 'regime change' with 'kinetic strikes'; the probability of an actual qualifying strike is likely around 20%.
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Arbitrage|Low Risk
Arbitrage Plan:
Buy 'No' for 'March 31'
Plan Description:
The current price for 'No' on 'March 31' is ~96.7c. With only 14 days left and de-escalation in progress, the probability of a surprise airstrike is extremely low. This offers a ~3.4% return in two weeks, translating to a very high annualized yield with minimal risk (Soft Arb).Sign up to view more information
Arbitrage: 3¢
|Annualized yield: 88.9%
Exotics
This is a highly unconventional geopolitical tail-risk market. While US-Cuba relations are tense, predicting a direct 'US airstrike on Cuban soil' is a low-probability black swan event, far outside the realm of standard election or economic forecasting.
Hedging
Crude Oil
CCL
Gold
S&P 500
Cuba's proximity to the US means any military strike would trigger significant regional panic. The most direct victims would be cruise lines dependent on Caribbean routes (e.g., Carnival Corp CCL), which could suffer a structural price crash. Additionally, geopolitical tension would boost safe-haven assets (Gold) and Crude Oil (Gulf of Mexico risk premium), while negatively impacting broad market indices.
Divergence
The market price (37% implied probability of a strike by year-end) suggests a high risk of kinetic conflict, whereas mainstream geopolitical analysis views the current 'prisoner release + talks' as a classic diplomatic de-escalation path. The divergence stems from prediction market traders conflating the macro outcome of 'US toppling the Cuban regime' with the specific mechanism of an 'airstrike,' while the US is highly likely to achieve its goals via non-kinetic means (economic blockade, internal subversion), thus avoiding a 'Yes' resolution under the specific market rules.
