Iran blocks Strait of Hormuz amid US ceasefire market stability

The US-Iran ceasefire by April 15 market sits at 100% YES as rising tensions around the Strait of Hormuz raise questions about whether traders are correctly pricing the risk of disruption.

Iran’s selective blockade of the strait signals potential for high escalation. Despite this, the April 15 ceasefire market remains at 100%, unchanged from last week. The April 30 market is also at 100%, up from 34% a week ago, showing traders have grown more confident in the ceasefire holding.

Face value on these markets runs $868,743 per day, but actual USDC traded is lower, pointing to thinner liquidity than the headline number suggests. The market’s ability to absorb large trades may be overstated. The term structure shows zero-point movements between dates, meaning trader expectations are flat across the next few months.

The persistent 100% odds across all sub-markets suggest traders are currently unfazed by the strait tensions. But this could reflect a lag in market reaction rather than genuine confidence in stability. At 100¢, a YES share for the April 15 ceasefire is already priced at resolution, leaving no room for profit unless new destabilizing events occur.

Watch for statements from CENTCOM or actions by the IRGC that could shift trader sentiment. The UN Security Council’s upcoming resolution on shipping protection could also move these markets.

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