Iran shuts Strait of Hormuz, exits talks, accuses US of attack plans

Iran shut down the Strait of Hormuz, withdrew from peace negotiations, and accused the US of planning an attack. The market on Trump announcing the lifting of the Hormuz blockade by May 31 sits at 78% YES, down from 90% yesterday.

Market reaction

Traders responded quickly, dropping May 31 odds to 78% YES. The April 19 market plummeted to 8% YES, with the largest single drop a 6-point decrease at 6:05 PM.

The ceasefire market for April 21 jumped to 25.5% YES, up from 6% yesterday, suggesting traders see a higher likelihood of conflict escalation. The diplomatic meetings market for April 30 fell to 21.3% YES.

Why it matters

Trading volumes show how thin these markets are. The Hormuz market’s USDC volume hit $29,602, while the ceasefire market saw $7,248. It takes just $1,419 to move the Hormuz market 5 points. The ceasefire market is even thinner, with $880 required for the same move.

Iran’s closure of the strait and withdrawal from negotiations make a quick resolution less likely. The combination of active hostility and broken diplomatic channels leaves few obvious paths to de-escalation before the May 31 deadline.

What to watch

At 22¢, a YES share in the diplomatic meeting market pays $1 if talks occur by April 30, a 4.5x return. To buy that, you’d need to think diplomacy can restart in 12 days.

Watch for Trump’s statements or any US military movements. New sanctions or military buildup at Hormuz would further shift odds.

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