Traders expect the U.S.-Iran ceasefire to hold into early November, then fade

Traders still expect the U.S.-Iran ceasefire to survive the next few days, but confidence slipped sharply late Sunday. A U.S. strike on Iranian land or internal waters before the end of Oct. 28, Iran time, would end it. The chance that none comes fell from all but certain to merely likely within a few minutes.

The reason for the drop is not clear. Reports reviewed do not point to a development close enough in time to explain it, so the move should not be tied to any single event.

Across the full set of questions, traders expect the truce to last into early November. Their estimates run from late October to after December 31. A truce lasting through Oct. 31 is still likely, but a ceasefire holding through Nov. 8 or Nov. 15 is now a toss-up. Lasting through Nov. 22, Nov. 30 or Dec. 31 looks unlikely. The longer-dated bets also weakened Sunday, and a truce through Nov. 22 went from a toss-up to unlikely.

The Oct. 28 bet had been strengthening. It rose on Saturday, held near its high through much of Sunday and peaked in the evening before the late fall. Earlier in the week it dropped sharply on Oct. 19 and recovered within hours, then dipped again on Oct. 21.

The backdrop is a conflict with its core disputes unresolved. On Oct. 21, reporting said President Donald Trump opposed a renewed strike before the U.S. midterms, and the White House said the U.S. would not attack before the election. On Saturday, Trump said a strike might come "maybe tomorrow," while also holding out the prospect of a deal. On Sunday he said there would be no strike that day. Iran's foreign ministry said messages were still being passed through intermediaries and that Tehran remained open to diplomacy, the Associated Press reported. Other reporting described negotiations as stalled.

The question counts only qualifying strikes. Air strikes and surface-to-surface missile or one-way drone attacks that hit Iranian land or internal waters count. Intercepted munitions, strikes at sea or in airspace, minor strikes and unexecuted threats do not.

The Oct. 28 deadline arrives before the Nov. 3 midterm election. Trump's remarks rule out a strike only for Sunday, so later action remains possible. Mediation is reported to be continuing, though no agreement has been announced.