An attack Iran talked itself out of pays 4% by August

Polymarket created a market at 3:26 on Tuesday morning asking whether Iran will attack Ukraine. By that afternoon, it had doubled to 10.5%. By Thursday it was back under 4%, which means betting against an Iranian strike pays about 4% when it closes on August 31.

The obvious objection is the drones. Russia launches roughly 400 Iranian-designed Shaheds at Ukraine on a busy night. But the rules require the strike to be initiated by Iran, with an Iranian claim or proof it came from Iranian soil.

The thing is, Russia now builds those drones itself. Ukraine's own commander-in-chief puts Russian output at 404 Shahed-type drones a day, assembled at Alabuga in Tatarstan. Iran has never fired anything at Ukraine.

So what created the market? On July 25, Ukrainian drones flew about 1,300km past their own front line and hit ships on the Caspian, one of them Iranian, killing a sailor from Bandar Anzali. Then:

• Iran's foreign minister, Abbas Araghchi, called Volodymyr Zelensky a freeloader and said the strike could not go unanswered.
• Iran's parliamentary security chief warned that Ukraine would soon learn Iran does not let things go.
• On Tuesday afternoon, the New York Times reported that Iran had weighed a missile strike on a Black Sea port, and that Western governments talked it out of the idea.

Then it stopped. Araghchi phoned Kyiv the same day, said Iran did not want an escalation either, and asked for compensation rather than revenge.

So, why would anyone bet on yes after all of this? We don't know, which is why betting against it pays about 4% in 32 days, a solid return.