Yesterday we talked about the potential for US to strike Iran.

Thanks to then Pentagon pizza trackers firing, F-22s pulled from the Super Bowl, and 112 C-17s heading to the Middle East.

Markets were pricing a 22% chance of a US strike on Iran by February 28th.

But oil? We asked: if there really were a strike to happen, wouldn't the prediction markets—the alleged all-seeing eye into the future—notice?

Except oil was flat.

Here’s the chart from yesterday’s issue.

We wondered, considering increased tensions wouldn’t there be a higher chance of oil hitting $70-$72 a barrel by the end of February?

Either that or oil knows something...

Turns out, we were early.

Look where prediction markets are putting the odds THIS MORNING: $70-$72 oil hits by the end of February…

49-55%. Wow. 50% chance at $72 oil and a 55% chance at $70.

Boy are we good or what.

If you missed yesterday's issue. Catch up here.

Real quick, yesterday morning the U.S. Department of Transportation's Maritime Administration said American-flagged ships should steer clear of Iranian waters in the Strait of Hormuz.

The US recommended vessels stay near Oman's waters and as far from Iran as safely possible.

About 20 million barrels per day (roughly 20% of global oil consumption) passes through the Strait of Hormuz.

Then by the afternoon oil rallied 1.5%

Brent crude settled at $69.04/barrel (up 99 cents).
WTI crude settled at $64.36/barrel (up 81 cents).

From Reuters:

"This week's crude trade, and possibly the rest of this month, will have little to do with oil fundamentals but much to do with injection and rejection of risk premium related to Iran." — Ritterbusch and Associates

The other thing we discovered yesterday is by mid-morning, Iran's Defense Ministry announced it will no longer publicly unveil military capabilities—shifting from "deterrence by display" to "deterrence by ambiguity."

At the same time, there's intel that IRGC commanders are looting the regime, stashing billions abroad in preparation for collapse. General Qaani has stolen $700 million for himself—funds in foreign bank accounts, a hotel in Uzbekistan, luxury Moscow apartments, and a Turkish villa.

I don’t know about you but doesn’t that sounds more like an exit strategy?…. just saying.

Oh, and Vice President JD Vance is visiting Armenia—right on Iran's northwestern border. Seems like an interesting location right now dontchya think?

Turns out we were way ahead of it.

In 24 hours oil strikes repriced to 55% for $70.

This morning, we’re wondering if 55% chance oil hits $70 by the end of February is still possible…

A whale just bet $100,000 on a US strike happening yesterday (February 9th) at 2% odds.

If it hits, the payout is $4 million.

I haven’t dug into this, but apparently the wallet sat inactive for 460 days, participated in one other markets. then dumped $100k on a 2% longshot.

Could it be a government insider? We don't know. and I haven’t looked at the size of the wallet or anything to see if $100k is really a lot for this “whale”…

Also, I’m always cautious to automatically label any action as “insiders”…

At the time no one knows.

Like in sports when athletes have a bad game it’s now automatically assumed they’re betting.

But speaking of whales, another account apparently accumulated $11K across 3 trades on "US strikes Iran by February 20" at an average price of 26.5%.

It’s not $100k. And as I’m thinking about it, who says $11k is considered a “whale”?

Even more, what makes an “insider”, and “insider”? These people could be complete morons.

But regardless, it’s interesting to see the prediction flows isn’t it?

(Quick sidebar: If you want whale alerts and notifications in the Prediction Market Edge dashboard, I’ll include them, let me know—we're wrapping up Version 1.0 soon. The ultimate goal: the cleanest, most individually customizable prediction market tool ever. Tracking exactly what you want, alerts when you want them, and more. 100% distraction-free.)

Back to today…let’s figure out a potential trade…

First, as a disclaimer, again, none of this is advice. I don’t have a dog in the fight.

If we're trading contracts for a strike to hit by the end of February, we’re racing the Feb 28 clock.

But if we look at oil, you're not taking a position on one specific binary event.

We’re essentially asking: "Will ANY of these things push oil to $70 in the next three weeks?"

Remember, tension could drive oil higher without a strike ever happening.

If we believe oil will hit $70 by Feb 28 but the US won't strike Iran by then, we could take YES on Oil >$70 (55¢) and NO on US strikes (78¢).

The thesis being tension drives oil. But an actual strike doesn't materialize.

Or maybe you think a strike will happen. Sending oil to the moon.

If you believe a strike happens (22% odds), oil breaks $70—and you think 55% is way too low… that could be a very high upside opportunity.

Smaller probability, but higher upside if both hit.

Or maybe it's all very aggressive posturing. Nothing happens.

Peace wins, oil fades.

In that case, you could take NO on both—no strike, no $70 oil by end of February.

The 18-point jump yesterday could’ve been an overreaction. Then markets give it all back over the next three weeks. Or today.

Hey, could happen, right?

What are the support levels on crude? Where's the real resistance? Is it overbought?

Again, to be crystal clear, none of this is advice, I'm not taking these positions—we're exploring what kind of trades could exist in the prediction markets…

But looking at the price action in the prediction market, an 18-point jump in one day and a 28-point move on the $72 strike is telling.

Oil >$70 by Feb 28 is sitting at 55¢. The question remains, will oil hit $70 a barrel inside the next three weeks?

There are a lot of paths here.

There’s a lot of opportunity in the prediction markets when you get creative. But that also means more ways to be wrong.

Talks could pick up, Iran concedes, oil gives it all back, and all strikes resolve to No.

Or things get kinetic, and oil gaps higher. The Yes’s have the best month of their life.

We’ll see. good luck out there.

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