Traders still expect the U.S.-Iran ceasefire to hold through Sunday, but doubt grows

Traders still expect the U.S.-Iran ceasefire to last through Sunday, but they are less confident than they were a day ago. Bets on the ceasefire holding through Sunday held steady for most of Friday, then dropped sharply late in the day. The outcome still looks likely.

The reason for the latest drop is not clear. Trump said Thursday, after meeting his national security advisers, that he would decide soon whether to resume major strikes on Iran. Axios reported that U.S. Central Command was finalizing preparations but had not received a new directive. On Friday, the Associated Press reported that Trump and Qatar's emir discussed easing tensions, and Bloomberg reported that Iran was considering Qatari proposals involving its nuclear program. None of the reporting found establishes what set off the late move.

The question is narrow. It resolves against a ceasefire only if the United States carries out an air strike or a surface-to-surface missile strike that directly hits Iran's land territory or internal waters before 11:59 p.m. Iran time on Sunday. Threats, preparations, intercepted munitions, ground incursions, cyberattacks, naval gunfire and strikes on Iran's maritime territory or airspace do not count.

Across the longer questions, traders are far more doubtful. A ceasefire lasting through Nov. 15 has fallen from likely to unlikely, and lasting through Nov. 30 or through the end of December also looks unlikely. Taken together, traders' central expectation is that the ceasefire lasts to about mid-November, with a range from early November to after Dec. 31. The single likeliest period for it to end is between now and Sunday.

The background is fragile. Trump pledged on Oct. 8 not to attack Iran before the Nov. 3 midterm elections. On Nov. 2, U.S. officials said American forces carried out limited strikes on Iran's Qeshm Island. Those came before this question was created.

What happens next depends on Trump's decision, which he has not scheduled, and on the Qatari-mediated discussions. A threat or preparations alone would not end the ceasefire as this question defines it. Only a qualifying strike before late Sunday night, Iran time, would.