Trump's recent warnings regarding military action against Iran if the ceasefire is not extended have significantly affected market expectations. As of today, the probability of a ceasefire extension before April 21, 2026, has dropped to 60%, down from a robust 86% just one day prior.
This shift in perception has caused the US-Iran ceasefire extension market to fall by 21.5 points, as traders react to heightened military risk. With only three days remaining until the deadline, the market is now showing a 9.5% chance that Trump will announce the ceasefire's end, a rise from 6% the previous day.
The trading volume provides critical insight. The ceasefire extension market recorded a trading volume of $82,767 in USDC, with a need for $9,463 in order book depth to create a 5-point move. In contrast, the ceasefire end market only trades about $7,248 daily, which can lead to sharp fluctuations from relatively minor orders. Notably, there was a 5-point spike in the ceasefire end market observed yesterday at 11:03 AM.
Traders are distinctly factoring in Trump’s aggressive stance, resulting in increased conflict risk assessments. Currently, shares betting against the ceasefire extension are valued at 36 cents each, offering a potential return of 2.8 times the investment if no extension is negotiated by the deadline. However, there's still time for a last-minute diplomatic resolution to alter these odds significantly.
Attention should be focused on Islamabad, where U.S. representatives are actively engaged in discussions. Any new developments from CENTCOM or insights from Pakistani mediators might swiftly impact market conditions and trading strategies.