Everything is Insider Trading
Prediction Markets, Iran
Reza Pahlavi had stopped telling people his name at parties sometime in the late eighties. It saved time. No one in Bethesda wanted to hear about the Peacock Throne while they were trying to discuss mortgage rates and youth soccer leagues.
He was sixty-four now, and the protests in Tehran had been going for three weeks. His phone buzzed constantly with messages from exile groups, diaspora journalists, old family retainers who still addressed him as “Your Imperial Highness” in emails sent from Gmail accounts. The regime was running out of money. The rial had collapsed. Videos showed crowds in Shiraz tearing down posters of the Supreme Leader.
Reza watched it all from his living room in Potomac, where the afternoon light fell across furniture his wife had picked out at Restoration Hardware.
He called Marcus Chen on a Tuesday.
They’d met at Williams in 1978, two months before everything fell apart. Marcus had been ROTC, destined for the Air Force, and Reza had been the son of the King of Kings, Light of the Aryans, Shadow of God. They’d played squash together. Marcus had never treated him differently after the revolution, which Reza had always appreciated. Now Marcus ran a venture capital firm with three billion under management and a house in Aspen that Reza had visited exactly once.
“I need to show you something,” Reza said. “In person.”
Marcus met him at a coffee shop in Georgetown, the kind with exposed brick and twelve-dollar lattes. He looked good for sixty-five. Healthy. The money helped.
Reza opened his laptop and turned it toward his old friend. “Do you know what Polymarket is?”
“Prediction markets. I’ve got some positions. Why?”
“Look at this.” Reza pointed to the screen. “Iranian regime change by end of year. Currently trading at twenty-one cents.”
Marcus studied the chart. The line had been climbing slowly over the past month, tracking the protests. “Seems about right. Maybe a little low given what’s happening.”
“What if we moved it?”
Marcus looked up. His expression didn’t change, but Reza had known him long enough to see the calculation happening behind his eyes. “Moved it how?”
“You have resources. If you bought enough contracts, you could push this to ninety, ninety-five percent. The market’s thin. It wouldn’t take as much as you’d think.”
“And then what? I’d be holding a bunch of contracts that say the regime falls, and if it doesn’t, I lose everything.”
Reza leaned forward. “When a prediction market shows ninety-five percent confidence in regime change, that becomes a story. CNN runs it. BBC runs it. Farsi-language media picks it up and broadcasts it into Iran. The protesters see it. The Revolutionary Guards see it. The generals start making phone calls, asking themselves if they want to be the last ones loyal to a dying system.”
Marcus was quiet for a moment. “You’re saying the prediction becomes self-fulfilling.”
“I’m saying I’ve been waiting forty-five years, and I’ve watched a dozen protests fail because people didn’t believe change was possible. The regime survives on the perception of inevitability. Take that away, and what’s left? Old men with sanctioned oil money that isn’t worth anything anymore.”
“And you’d be, what, the alternative?”
“I am the alternative. I’ve always been the alternative. The constitution still exists. The monarchy was never legally dissolved; it was interrupted. Every serious opposition group knows my name.” Reza smiled, and for a moment Marcus could see the young man he’d known, the one who’d talked about Zoroastrian philosophy at two in the morning and genuinely believed history had a shape. “I just need people to believe it’s real. Your money makes them believe.”
Marcus picked up his coffee, took a slow sip, set it down. He’d made his fortune understanding leverage, understanding how small inputs could move large systems. This was the same principle, applied somewhere new.
“What’s in it for me?”
“How much would it take to move the market?”
“To get it into the nineties and keep it there?” Marcus did the math in his head. “Eighty, maybe a hundred million over a few weeks. Depends on how others respond.”
“And Iran’s GDP is four hundred billion. The oil reserves alone are worth trillions. I become head of state, I can arrange contracts, concessions, partnerships. Fourteen percent annual return on your investment, guaranteed for life. Structured however your lawyers want.”
Marcus laughed softly. “Fourteen percent.”
“I’m being conservative. I don’t want to insult your intelligence with promises I can’t keep.”
“The ten-year Treasury is yielding four point three.”
“Yes.”
Marcus was quiet again. Outside, a woman walked past with a stroller. A taxi honked. The world continued in its ordinary way, indifferent to conversations about thrones and revolutions.
“You know what I always liked about you?” Marcus said finally. “You never stopped believing you were supposed to be king. Forty-five years in the suburbs, and you still think like one.”
“Is that a yes?”
Marcus pulled out his phone and opened his brokerage app. “Send me the contract details.”
Reza nodded. He closed his laptop and looked out the window at the Georgetown street, at the brick townhouses and the tourists and the college students with their iced coffees. Somewhere on the other side of the world, people were dying for the idea of him. Here, he had just sold fourteen percent of that idea to a man he’d once beaten at squash.
He stood, shook Marcus’s hand, and walked out into the afternoon sun. His phone was already buzzing again, this time more insistently.
He didn’t check it. For the first time in forty-five years, he didn’t need to.