Traders placed over $1bn in suspiciously well-timed wagers on developments in the US-Israel war with Iran, reaping huge profits and prompting calls for investigation into potential insider trading. The bets, placed on online platforms like Polymarket and in oil futures markets, accurately predicted the timing of airstrikes, the assassination of Ayatollah Ali Khamenei, and a ceasefire announcement by President Donald Trump.
On 27 February, 16 accounts each made over $100,000 after betting that the US would strike Iran the next day, which it did. A single user, under the account name “Magamyman”, made over $553,000 after betting that Khamenei would be “removed” from power moments before he was killed in an Israeli airstrike, according to a complaint filed with the Commodity Futures Trading Commission (CFTC) by consumer advocacy group Public Citizen.
The unusual surge of wagers extended to oil futures markets. On 23 March, traders placed $580m in bets on falling oil prices just 15 minutes before Trump announced “productive” talks with Iran. On 7 April, $950m was wagered on oil price falls hours before Trump declared a temporary ceasefire with Iran. In both cases, the trades generated substantial windfalls as oil prices dropped.
Lawmakers and experts have raised concerns that these trades may be based on insider information, noting that the scale and timing make simple luck unlikely. “Not only the timing, but the amount of these bets makes it look very likely that someone had insider knowledge,” said Craig Holman of Public Citizen. However, legal experts caution that proving illegality is complex. “We can’t say from the outset whether any of these trades were illegal,” said Andrew Verstein, a law professor at UCLA, but they “bear the hallmarks of suspicious trades that would naturally warrant investigation.”
Regulators face challenges in cracking down on such activity, as betting markets operate across different platforms and jurisdictions. “Is the problem that we don’t have legislation or that we don’t have enforcement capabilities?” asked Columbia law professor Joshua Mitts. “To have a law that can’t really be enforced effectively given the technological limitations, it’s sort of putting the cart before the horse.”
