This week, we speak with Luana Lopes Lara, who is the co-founder of KalshiEX LLC. Kalshi has developed an asset class – “event contracts” – and a financial exchange for trading on the outcome of events. After receiving approval from Commodity Futures Trading Commission (CFTC), Kalshi became the first regulated financial exchange dedicated to trading event contracts.
She discusses how the firm came about out of her first job0 on Wall Street: She was working as a Quantitative Trader at Citadel Securities and a Software Engineer at Bridgewater Associates; her cofounder Tarek Mansour was a Quantitative Trader at Citadel and an Equity Derivatives Analyst at Goldman Sachs.
There was a specific need to hedge real-world events directly but no mechanism for doing so. Lara and Mansour dove into why this was not available, calling 70+ attorneys only to be told it doesn’t exist because it cannot exist. Coming from a technical rather than financial background — both were undergraduates at MIT — they plowed ahead anyway. Their tenacity led to being the first and only event contract platform approved and federally regulated by the CFTC.
Kalshi’s event contracts are always Yes/No questions, with clear rules for contract settlement (a defined determiner of the outcome). They expect people with greater interest in real events than traditional financial assets to drive the growth of their business.
A list of his favorite books is here; A transcript of our conversation is available here Monday.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Mark Jenkins, Head of Global Credit, at Carlyle. The firm manages over $300 billion in assets. Carlyle’s Global Credit platform manages over $73 billion in assets in liquid, illiquid, and real asset strategies.
Luana Lopes Lara favorite books
mericana: A 400-Year History of American Capitalism by Bhu Srinivasan
Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dr. Dan Ariely
Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough and John Helyar