NATO x Russia military clash by December 31, 2026?

The market is pricing a 21% probability of NATO-Russia military contact by end-2026, but the extreme 537% implied yield on "Yes" signals substantial mispricing or tail-risk premium given the binary nature of geopolitical escalation. Price has surged 4 cents over seven days (17¢ to 21¢) on $3.9M daily volume, suggesting recent risk reassessment, though the $27.6M open interest and tight 3¢ spread indicate reasonable liquidity for a long-dated geopolitical contract with 256 days to expiry. The neutral regime score and moderate cliff risk (4/10) suggest the market hasn't yet priced in a specific triggering event, making this a relatively stable position for either directional or hedging purposes.

Resolution rules

This market will resolve to "Yes" if there is a military encounter between the military forces of a NATO country and Russia between January 2, and December 31, 2026, 11:59 PM ET. Otherwise, this market will resolve to "No". A "military encounter" is defined as any incident involving the use of force such as missile strikes, artillery fire, exchange of gunfire, or other forms of direct military engagement between NATO and Russian military forces. Non-violent actions, such as airspace violations, firing of warning shots (such as the June, 2021 Black Sea Confrontations between Russian forces and HMS Defender), or cyberattacks will not qualify. Interception of missiles or other one-way attack or loitering munitions (e.g. Shahed drones) which are targeting a 3rd party other than the listed countries or their respective forces will not alone qualify. Shooting down UAVs which are not munitions (e.g. MQ-9, Orlan 10, Orion, Bayraktar TB2, etc.) will qualify. Intentional physical collisions, including aerial interceptions and naval ramming without the direct use of weaponry, such as the 2023 Black Sea incident—where a Russian Su-27 damaged a U.S. MQ-9 Reaper drone's propeller, leading to its crash— will not qualify regardless of damage. Military contractors will qualify only if confirmed to be operating under the direct command or coordination of the respective state’s armed forces (e.g. the Battle of Khasham would not qualify). The resolution source for this market will be a consensus of credible reporting.

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Regime

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