We Study Billionaires - The Investor’s Podcast Network TIP458: Why Billionaire Charles Schwab Invested in Kalshi w/ Luana Lopes Lara
Jun 19, 2022
Luana Lopes Lara, co-founder of Kalshi, discusses her groundbreaking event trading platform, the first to gain CFTC approval. She shares insights about Charles Schwab's investment and the challenges faced in building Kalshi. The conversation also touches on gamified trading platforms, the necessity of mentorship in entrepreneurship, and the contrasting cultures of influential financial firms. Luana emphasizes the importance of user engagement and adaptability in trading markets, drawing on her experiences from high-stakes finance to create innovative solutions.
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Kalshi's Core Idea
- Kalshi is a CFTC-regulated exchange that allows trading on event outcomes, creating a new asset class called Event Contracts.
- Users buy yes/no positions on events, with market prices reflecting the probability of occurrence.
Regulatory Hurdles
- Obtaining CFTC regulation took Kalshi two and a half years and involved navigating significant legal hurdles.
- Despite 65 lawyers initially rejecting the idea, they persevered, highlighting their grit and patience.
Democratizing Hedging
- Event contracts offer hedging and price discovery, similar to traditional derivatives markets.
- This democratizes access to tools previously available only to large institutions, enabling individuals and small businesses to manage risk.