Trade idea: Israel x Hamas ceasefire cancelled by Saturday?
20% potential return (resolved by Saturday)
Introduction
The Polymarket odds for the “Will the Israel x Hamas ceasefire be cancelled by Saturday?” have fluctuated, going from 13% Tuesday morning to 45% Tuesday evening, to currently sitting at 18%. In geopolitical betting we have this term “nothing ever happens” and that’s where I think this market is headed.
This all kicked off because Hamas announced that the handover of hostages scheduled for Saturday would be postponed until further notice, citing Israel's failure to comply with the terms of the ceasefire agreement. Despite the media frenzy following this, there are strong reasons to believe the ceasefire will continue. Even with political tensions and occasional setbacks, key diplomatic efforts, international pressure, and mutual strategic interests suggest that both sides have incentives to extend the truce. Traders betting on “No” may be positioned for a profitable outcome.
Why the Ceasefire is Likely to Hold
The ceasefire between Israel and Hamas, while fragile, has several factors working in its favor that increase the likelihood of it holding.
International Diplomatic Pressure
The United States, Egypt, and Qatar have invested significant diplomatic capital in mediating the ceasefire and ensuring its continuation. These countries played a crucial role in drafting and securing the initial agreement, and their continued involvement is vital for maintaining stability. Strong diplomatic efforts have already resulted in multiple extensions of the truce, demonstrating the effectiveness of their mediation. Given the high stakes involved, including regional stability and humanitarian concerns, these international actors are likely to continue pushing for de-escalation and working to resolve any disputes that arise between Israel and Hamas. Their influence can help prevent or at least delay a return to hostilities, as both sides are sensitive to international opinion and the potential consequences of defying these key mediators.
Hamas’s Interest in Maintaining the Ceasefire
Despite recent delays and accusations of violations, Hamas has a vested interest in prolonging the ceasefire. The truce provides a crucial opportunity for humanitarian aid to flow into Gaza, alleviating the suffering of the civilian population and bolstering Hamas's standing within the territory. The influx of essential resources like food, medicine, and construction materials helps to address the dire humanitarian situation and allows Hamas to showcase its ability to govern and provide for the people. A collapse of the ceasefire would immediately cut off these benefits, undermining Hamas's authority and potentially leading to increased discontent among the Gazan population. Additionally, the ceasefire provides Hamas with a period to regroup, rearm, and replenish its forces, which are critical for maintaining its power and influence in the long term.
Israel’s Cautious Approach
Although Israeli Prime Minister Netanyahu has made firm statements regarding the resumption of military operations if hostages are not released, Israel is carefully balancing its military objectives with its international relations. The Israeli government is facing mounting pressure from key allies, including the United States, to allow more time for negotiations and to prioritize the release of hostages. This external pressure makes an immediate return to large-scale hostilities less likely, as Israel must consider the potential diplomatic and political repercussions of defying its allies. Furthermore, Israel is aware of the humanitarian crisis in Gaza and the potential for further damage to its international reputation if it resumes intense fighting. The need to maintain international support and legitimacy requires Israel to adopt a more cautious approach, prioritizing targeted operations and diplomatic efforts over a full-scale military offensive.
A Strategic Play in the War Game
The current situation surrounding the ceasefire between Israel and Hamas can be viewed through the lens of strategic warfare, where actions often mask deeper intentions. Hamas's threat to postpone the hostage release, citing alleged Israeli violations of the ceasefire agreement, may be a calculated move to gain leverage. Rather than genuinely seeking to end the ceasefire, Hamas could be attempting to strengthen its negotiating position or probe the resolve of both Israel and the United States. This tactic aligns with common war scenarios, where first-order thinking is often misleading, and hidden agendas play a significant role. Hamas might be using the hostage release as a bargaining chip to extract further concessions from Israel, test the limits of international pressure, or assess the red lines of the involved parties. The group's actions could be aimed at securing more favorable terms for the second phase of negotiations, such as a complete Israeli withdrawal from Gaza or a greater say in the future governance of the territory. By creating uncertainty and raising the stakes, Hamas seeks to gain a strategic advantage in the ongoing conflict.
Trade Analysis
For well-researched traders, the probability of the ceasefire holding appears stronger than assumed if you base your opinion on media headlines and first-order thinking. A deeper analysis, considering diplomatic pressure, Hamass' interests, and Israel's caution, suggests the ceasefire's continuation is more likely than current market odds imply. We put the real probability of the ceasefire ending at between 3-7% making the 20% odds on offer a strong risk:reward play. TLDR: Well-researched traders can profit by betting on the ceasefire holding.
Conclusion
While tensions remain, the broader geopolitical landscape suggests that the ceasefire is likely to hold. Diplomatic efforts, strategic calculations from both Hamas and Israel, and humanitarian considerations all point toward an extended truce. Traders positioning on the “No” side of this trade are aligning with current diplomatic trends and international pressures, while simultaneously going against media sentiment, which is often the recipe for a profitable trade.
Disclaimer & Risk Warning: this newsletter is intended for information and entertainment purposes only. Predictions are based solely on our personal opinions and do not represent recommendations to place any specific trade or bet. Prediction markets are highly risky and most prediction market participants lose money over time. The Poly Newsletter accepts no responsibility for any financial loss or decision. We strive to provide accurate analysis but mistakes and errors do occur. No warranty is made to the accuracy, completeness or correctness of the information provided. The information in the publication may become outdated and there is no obligation to update any such information and no liability shall be accepted for any loss.
 | A guest post by
|