Will there be between 0 and 20 average daily transits of the Strait of Hormuz on July 31?
Alpha Opportunity
Alpha Thesis
Our AI estimates a true probability of 25.0% vs the market's 74.0%, identifying a 49.0% edge on the NO side. Historically, the Strait of Hormuz sees a high volume of daily transits, often exceeding 20. However, geopolitical tensions and disruptions have occasionally reduced this number significantly. Recent reports indicate ongoing disruptions due to attacks on commercial ships, reducing traffic since February 2026. Current data shows a significant drop in daily transits, with recent averages around 11 vessels per day.
📐Key Metrics
Key Findings
- Historical average daily transits — Historically, the Strait of Hormuz sees a high volume of daily transits, often exceeding 20. However, geopolitical tensions and disruptions have occasionally reduced this number significantly.
- Current geopolitical tensions and disruptions — Recent reports indicate ongoing disruptions due to attacks on commercial ships, reducing traffic since February 2026. Current data shows a significant drop in daily transits, with recent averages around 11 vessels per day.
- Probability of continued disruptions — P(Disruptions continue) = 0.6, P(Transits remain below 20 given disruptions) = 0.8, leading to a combined probability of 0.48 for transits staying below 20.
- Updating with current evidence — Starting with a base rate of high transits, the strong evidence of ongoing disruptions significantly updates the probability towards fewer transits.
- Resolution Criteria — The market resolves to YES if the finalized 7-day moving average of transit calls for July 31, 2026, is between 0 and 20. It resolves to NO if the average is outside this range.
- 10 Sources Analyzed — Including IMF - Strait of Hormuz - Daily Transit Calls & Transit Trade ..., eventc10000004 - IMF PortWatch, Strait of Hormuz Live Tracker — Real-Time Shipping & Oil ...
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Alpha Quality Factors
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Human Bias Detected
Cognitive biases creating this alpha opportunity
The market overweights vivid, recent events, making this outcome feel more likely than it actually is.
The crowd may lack specialized knowledge that narrows the true probability range.