Our Hormuz April NO position is worth $803 on a $500 bet. The market closes tomorrow at 0.4%. Nine days ago, it was at 38%.

The trade was not a gamble. It was arithmetic.

Why the market was wrong

On April 20, Hormuz April YES was trading at 38%. The market gave a one-in-three chance that Strait traffic would normalize before month-end. Here's what was true on that date:

• The ceasefire had just expired (April 19). Iran's 72-hour window closed with zero diplomatic progress.
• Iran had fired on ships during what was supposed to be a truce (April 18).
• Only 16 ships per day were transiting, down from the normal 60+.
• There was no active diplomatic track.

Even if talks started the next day and produced an agreement immediately, normalization requires Iran to withdraw naval assets, commercial insurers to resume coverage, and shipping lines to re-route vessels through the Strait. That takes weeks, not days. Ten calendar days was not enough time.

The market was mispriced because traders anchored on hope rather than taking the timeline constraint seriously. A 38% YES price implies a plausible path to resolution in 10 days. There was not one.

Result: Hormuz April NO at $0.62 → $0.996. Return: +61% in 9 days.

Looking ahead: May at 35.5%

Hormuz May is at 35.5% YES. For the Strait to normalize by May 31, all of the following must happen in 32 days:

1. A new ceasefire agreement (none is active).
2. Iran withdraws its naval blockade (currently operating a dual inner/outer blockade).
3. Commercial shipping resumes normal transit volumes (requires insurer confidence).
4. Traffic returns to 60+ ships/day (currently around 5).

The blockade has been escalating, not winding down. Iran's foreign ministry said reopening is "impossible" as long as sanctions persist.

June: knowing when you don't have edge

Hormuz June is at 58.5%, implying better than even odds of resolution within 60 days. Two months is enough time for a military intervention, a diplomatic breakthrough, or a sanctions deal. The uncertainty is genuinely high. We're not touching June.

Knowing when you don't have edge is as important as recognizing when you do.

This is from The Market Oracle, a weekly prediction market newsletter. We also published an empirical calibration analysis of 7,661 Polymarket markets (updated per feedback from this community — the Expected column now uses actual mean probabilities per bucket).