Iran’s proposal to formalize military control of the Strait of Hormuz has pushed the probability of traffic returning to normal by May 15 down to 18% YES, falling from 24% a day ago.
Market reaction
The Strait of Hormuz traffic market has 17 days left until resolution. Trading volume is at $1,110,842 in face value but only $205,061 in actual USDC, and $76,557 is required to move the price by 5 percentage points, a well-defended position.
The Iran coup attempt by June 30 market ticked up to 12.5% YES from 12% yesterday. Traders appear to read the proposal as a possible source of internal dissent, though odds remain low with 63 days to resolution.
The likelihood of Trump announcing a blockade lift by May 31 dipped to 59.5% YES from 58% yesterday, consistent with skepticism about a diplomatic breakthrough while Iran hardens its position.
Why it matters
The proposed law would formalize existing military operations in the strait, which could escalate the conflict rather than just maintain the status quo. The open question for traders is whether this is a genuine policy shift or a negotiating tactic ahead of potential talks.
What to watch
The Strait of Hormuz traffic market offers a contrarian bet: buying YES at 18¢ pays 5.5x if it resolves YES. That bet requires believing diplomatic efforts will succeed within 17 days. Watch for statements from CENTCOM and the Iranian Foreign Ministry, and any signs of ceasefire extensions.
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