Polymarket's Bab el-Mandeb contract pays only after transits fall another third

Another third off the daily arrival count is what separates the traffic the strait is carrying from the level at which the contract pays ^[16]. Run the source's own comparison backwards and pre-crisis traffic was 25 to 37.5 crossings a day ^[22], so the resolution line sits at 27% to 40% of normal ^[23].

The money is already going out at fifteen. War-risk cover for a transit is quoted at 0.7% to 2% of hull value ^[9]. A $200m hull sits inside the range Crypto Briefing describes for large container ships, and at those rates that is $1.4m at the bottom and $4m at the top ^[17]. The publication reports per-voyage costs above a million dollars ^[10]. A contract that resolves only on collapse returns none of it.

At a million dollars of premium a sailing, the whole Polymarket book across the related Bab el-Mandeb contracts is equivalent to five to fourteen voyages of war-risk cover ^[18]. A buyer who needs a quarter's sailings hedged cannot get that here, and the remainder keeps being paid to underwriters.

As a price it is still useful. Shares pay $1 if the event occurs and nothing if it does not ^[12], so 22 cents buys 78 cents of upside, a net 3.55 to 1 ^[20]. About three months are left to the December 31 resolution ^[15]. Multiply the 22% by the 10 to 14 days a Cape of Good Hope routing adds to an Asia-Europe voyage ^[14], and a planner has 2.2 to 3.1 days of expected extra transit to put in the schedule ^[19].

The Houthis say navigation remains open to all vessels except those linked to nations they consider hostile ^[8]. If that holds, arrivals can sit above ten for months while a particular operator is barred in practice, and the contract expires worthless. Further gains after Mokha, Perim Island and the Hanish islands, or an international military response, take arrivals under ten and it pays ^[7]. Or nothing moves and the price decays into December. Roughly 12% of global trade normally passes through the strait ^[3]. Qatar has publicly warned that an effective closure would be a catastrophe for global energy markets, with the passage carrying liquefied natural gas from the Persian Gulf to European and Asian buyers ^[11].

I would buy the 22 cents as information and keep paying the premium. The resolution threshold sits below the level at which cash is already leaving, so the contract covers the state the strait might reach and not the state it is in. The counter-case is a decent one. Chokepoints do not always degrade gently, and if fifteen becomes single digits inside a fortnight the threshold and the loss arrive in the same week. At that point 22 cents bought 78.