What Prediction Markets Are Forecasting

Prediction markets currently estimate there is roughly a 2 in 3 chance that the United States will conduct a military strike on Iranian soil or an official diplomatic facility before March 31, 2026. This means traders collectively see such an event as more likely than not. The significant amount of money wagered, over $6 million, signals that many people are paying close attention to this geopolitical risk.

Why the Market Sees It This Way

The high probability stems from ongoing regional tensions that have already seen direct confrontations. In early 2024, the U.S. and Iran exchanged strikes, with the U.S. hitting Iran-linked targets in other countries and Iran launching missiles at Iraq and Syria. A major escalation occurred in April 2024 when Israel struck an Iranian diplomatic building in Damascus, killing senior Iranian commanders. Iran responded with a direct drone and missile attack on Israel.

This cycle of action and retaliation has created a precedent. Markets are pricing in the risk that a future Iranian-backed attack causing American casualties, or a major Israeli operation, could push the U.S. to target Iran directly rather than its proxies. The historical U.S. and Israeli policy of deterrence, aiming to prevent further attacks, is now being tested in a more volatile environment.

Key Dates and Events to Watch

There is no single scheduled date for a potential strike. The risk is event-driven. The main triggers to watch are any attacks on U.S. personnel or allies in the Middle East that are attributed to Iran. A high-casualty event would sharply increase the immediate probability. Other signals include major Israeli military actions against Iranian nuclear facilities or senior leadership, which could draw in the U.S. Diplomatic developments, like the collapse of nuclear deal negotiations or the outcome of the U.S. presidential election, could also shift the long-term odds by changing strategic calculations.

How Reliable Are These Predictions?

Prediction markets have a mixed but often insightful record on geopolitical events. They are generally better at forecasting near-term, binary outcomes than long-term complex ones. For this question, the 38-day window until the current contract expires is relatively short, which tends to improve accuracy as traders focus on immediate risks. However, a major limitation is that these markets can be highly reactive to news headlines, causing probabilities to swing wildly after a single event. They are a useful gauge of informed sentiment, but not a crystal ball. The sheer volume of money on this topic suggests the consensus is worth noting, even if the future remains uncertain.