Daily Market Mispricings: 2 Geopolitical Events Where We Disagree With Polymarket — May 26, 2026

TL;DROn May 26, 2026, Naly’s biggest geopolitical disagreement with Polymarket is Iran airspace risk: the May 27 contract trades around 17c YES while we mark it 78c fair, and the May 31 line sits near 25c versus the same 78c fair value. The sharpest reason is rule fit: a documented western Tehran FIR shutdown likely already qualifies as a major regional closure.

Key Takeaways

Naly sees both Iran airspace contracts as answer flips, not just same-side confidence differences.

The core disagreement is over whether the reported western Tehran FIR shutdown already satisfies the market’s definition of a major regional closure.

Polymarket appears to be discounting heavily for adjudication ambiguity, official denials, and daylight exceptions.

We think those caveats matter, but not enough to outweigh a reported NOTAM-driven closure across a major Iranian airspace region.

2 Mispricings at a Glance

Event Snapshot

Iran closes its airspace by May 27?

YES Resolves May 27, 2026 Pending 82/100 confidence

Polymarket Top Answer NO 83%

Naly Top Answer YES 78%

Max Payout if Correct +83c

0c 50c $1.00

Polymarket Naly

Why we disagree: Market seems to underweight the chance that a documented western Tehran FIR shutdown already meets the contract’s major-region threshold.

Event Snapshot

Iran closes its airspace by May 31?

YES Resolves May 31, 2026 Pending 82/100 confidence

Polymarket Top Answer NO 75%

Naly Top Answer YES 78%

Max Payout if Correct +75c

0c 50c $1.00

Polymarket Naly

Why we disagree: Same evidence base, but with a longer deadline; we think the market is still overpricing disqualification risk relative to the written rules.

How to read this: Polymarket Top Answer and Naly Top Answer show the final answer each side sees as most likely. Max Payout if Correct shows the gross upside from the current quote to the $1 settlement if the selected contract side wins. The horizontal graph still shows where that selected side sits on a 0c to $1 range for Polymarket versus Naly.

Event 1

Iran closes its airspace by May 27?

GeopoliticsContract · YESResolves May 27, 2026Pending82/100 confidence

+83c

Max Payout if Correct

Polymarket Top Answer NO 83%

Naly Top Answer YES 78%
Trade on Polymarket →

Market seems to underweight the chance that a documented western Tehran FIR shutdown already meets the contract’s major-region threshold.

Causal Chain

Cause Iran’s civil aviation authorities reportedly issued a NOTAM closing the western part of the Tehran FIR through May 25 with only limited daylight exceptions.

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Effect That broad regional shutdown likely disrupted commercial arrivals, departures, and transit across a major Iranian airspace region.

↓

Projection If resolution follows the written threshold rather than the headline phrase “nationwide closure,” the contract should lean toward YES by the May 27 deadline.

Key Factors

| Factor
▲ | Polymarket’s market page says a broad closure of a major Iranian airspace region can qualify, even with limited exceptions.
▲ | Recent reporting says Iran suspended activity across the western Tehran FIR from May 22 to May 25.
▲ | The same reporting says only a limited number of airports were allowed to operate, and only during daylight hours.
▲ | U.S.-Iran tensions remained elevated on May 25 after reported U.S. strikes on Iranian boats and missile launch sites, which supports the security rationale for maintaining aviation restrictions.
▲ | Iranian official denials appear aimed at avoiding the impression of a new nationwide shutdown, but denial language does not automatically negate an already-reported regional closure.

Bayesian Calculation

Base rate: Start from the market-implied 17% YES.

Positive update: A reported NOTAM-backed closure of the western Tehran FIR is strong evidence that the contract’s “major region” test may already be met.

Negative update: Daylight exceptions, partial airport operations, and Iranian denials create genuine adjudication risk.

Naly estimate: After netting the evidence, we land at 78% YES, or a 78c fair price.

Alternative explanation: The market may be reading the rule more narrowly than we are. If traders think only a near-nationwide shutdown of named airports counts, then they are pricing not the factual disruption itself but the odds that Polymarket interprets the disruption as sufficiently broad.

What Would Make Us Wrong

We are wrong if the reported closure is judged too partial, too temporary, or too geographically narrow under final adjudication. We are also wrong if credible follow-up reporting shows the NOTAM did not suspend enough commercial operations to satisfy the market’s threshold.

Fresh Checks

Polymarket rules and current pricing for the May 27 line

Iran denies new NOTAM limiting flights across country

Iran closes western airspace as U.S. weighs new strikes

Axios: Trump met top advisers on Iran as he weighs return to war

Event 2

Iran closes its airspace by May 31?

GeopoliticsContract · YESResolves May 31, 2026Pending82/100 confidence

+75c

Max Payout if Correct

Polymarket Top Answer NO 75%

Naly Top Answer YES 78%
Trade on Polymarket →

Same evidence base, but with a longer deadline; we think the market is still overpricing disqualification risk relative to the written rules.

Causal Chain

Cause The same reported May 22 to May 25 western Tehran FIR shutdown matters here because it happened before the May 31 deadline.

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Effect If that event already qualifies, then the later-dated contract should inherit much higher YES odds than the market is assigning.

↓

Projection Even if adjudication stays uncertain, the extra time window to May 31 should not reduce fair value below the already-observed closure evidence.

Key Factors

| Factor
▲ | The later contract benefits from the same reported closure evidence that supports the May 27 line.
▲ | Polymarket’s current May 31 pricing remains low relative to the rule language around a major regional closure.
▼ | Recent Reuters reporting on fresh U.S. strikes in southern Iran suggests the military-risk backdrop remains live rather than fully de-escalated.
▲ | Ongoing diplomatic talks can cap the odds of broader escalation, but they do not erase the significance of a closure reportedly already issued.
▲ | The market may be anchoring too hard on political denials and too little on operational aviation restrictions.

Bayesian Calculation

Base rate: Start from the market-implied 25% YES.

Positive update: The reported closure predates the May 31 deadline, so time decay is not the main issue; rule interpretation is.

Negative update: Temporary scope, limited airport exceptions, and ambiguous enforcement still lower confidence from certainty to a high-but-not-maximal estimate.

Naly estimate: We still reach 78% YES, equivalent to a 78c fair price.

Alternative explanation: The cleanest case against our view is that traders are treating this as a resolution market, not an event-detection market. In that framing, the real wager is whether Polymarket’s final source stack will affirm a qualifying closure beyond reasonable dispute, not whether meaningful operational restrictions occurred.

What Would Make Us Wrong

We are wrong if subsequent reporting narrows the shutdown into a non-qualifying set of localized or nighttime-only restrictions, or if official and consensus reporting converge on the view that major commercial operations at named airports continued broadly enough to fail the contract test.

Fresh Checks

Polymarket rules and current pricing for the May 31 line

Reuters: U.S. military strikes Iranian boats and missile launch sites

Report on the western Tehran FIR closure and airport limits

Axios: Trump says he is "50/50" on Iran deal or bombs

Conclusion

The watchpoint into May 27, 2026 and May 31, 2026 is not just whether Iran tightens aviation controls again, but whether credible reporting and official aviation language keep pointing to a closure broad enough to satisfy Polymarket’s regional-threshold wording. The key catalysts are new NOTAMs, airport operating-status updates at named hubs, and any resolution-source clarification that settles whether limited daylight exceptions still count inside a major airspace shutdown.

Methodology

Naly’s geopolitical mispricing method follows the same structure as our finance roundups: start with the live market price, convert that price into implied probability on the quoted contract side, compare it with our independent fair probability, then explain the gap using causal mechanisms and resolution-rule fit rather than headline aggregation. Our public calibration and historical scoring are tracked at /track-record.

Disclaimer

This article is analysis, not investment advice. Prediction markets can resolve on rule interpretation as much as on real-world events, so a fact pattern can be directionally right and still settle against a position if the contract wording is read differently.