The Newest Trading Platform Can Change the Game for Your Money – in More Ways Than One

Shah Gilani Feb 18, 2021
1 

It’s finally happened. Someone’s created the ultimate trading contract.

It’s something so simple; it’s a binary contract that you either bet “yes” or “no” on. It’s expansive, meaning you can bet on almost anything. It’s something that’s going to be insanely successful, meaning billions of contracts will trade every day. It’s something so cheap, meaning a contract will at most only ever cost $1.00. It’s something you’re going to trade.

What is it? Well… it’s Kalshi, a platform for anything and everything. And it’s going to revolutionize the game in more ways than one.

So let’s dive in…

Everything and More with Kalshi

The word Kalshi is derived from the Arabic word for everything.

Kalshi is a company. It’s also a CFTC-approved exchange, or “Designated Contract Market.”

It’s also what tradable contracts of “everything” will be called.

It’s the brainchild of two 24-year-olds, Tarek Mansour and Luana Lopes Lara. Calling them smart would be like calling the Grand Canyon a ditch. They’re both former researchers at the Massachusetts Institute of Technology (MIT). Tarek interned at Goldman Sachs, where he says he got the idea for Kalshi. Luana interned at Citadel and Bridgewater Associates.

The basis of the Kalshi contracts to be traded on the Kalshi exchange are “events.”

They’re event contracts. You’ll be able to wager, or bet, because let’s call it what it is, qualified gambling, on “questions about future events.”

Confused? Don’t be. Examples of these questions are posted on Kalshi.com. For example, questions like: “Will total U.S. total energy consumption increase this month? Will the 2021 Tokyo Summer Olympics be canceled? Will U.S. greenhouse gas emissions increase this year? Will federal student loan forbearance be extended? Will the 30-Yr FRM rate increase this week?”

Questions that we’re always asking, sometimes rhetorically. Well, soon enough you’ll be able to bet on the answers.

For less than a $1.00 you can bet “yes” or “no.” Imagine, when the outcome of a question is equally debatable contracts would probably trade at $0.50 for a yes bet and $0.50 for a no bet. Of course, you might want to make more than a $0.50 bet.

At “expiration” when the question is answered, you either win or lose. If you win you win $1.00, its winner-take-all, if you lose you lose a dollar, or millions of dollars if you bet like some gamblers.

Not all questions or bets on events will be eligible for “speculating” on (LOL, speculating, I had to go there). You won’t see bets on whether someone will be assassinated, or whether a building will burn down. Because, you know, those kinds of bets could possibly, just saying, make someone do something… you know where I’m going with that and so do regulators and Kalshi’s people.

Of course, because the possible outcome of a questioned event might become clearer before its ultimately decided, the value of yes and no contracts will fluctuate.

So, if you bet yes, it’s going to be the coldest February in Texas in a century, and Texans are freezing their boots off already, the value of your yes contract, or contracts (because I’d bet the ranch) would be close to that magic whole dollar level and you might sell it, or them, back to the bettors who are about to lose a dollar, for maybe 90 or 95 cents.

That makes the trading part of the betting more like speculation and hedging and all the other financial terms the Kalshi people must have thrown at the CFTC when they cozied up to them and said, “I have a question for you about us starting an event trading exchange.”

Some big players are backing Kalshi. The startup, which was founded in 2018, just raised $36 million from the likes of Sequoia and Henry Kravis. And there’ll be a lot of big players stepping up whenever Kalshi needs more money because it’s eventually going public.

It’s going to be a homerun, make that grand slam.

And when it does there will be huge payouts. Investors in Kalshi aren’t just investing in a revolution, but are investing in the large dividends heading for their pockets. It’s a great play for long-term investors, but finding start-ups as golden as Kalshi can be difficult.

Deals can close in a matter of hours, so they are easy to miss. But another one-two punch is coming your way, one so intense it could knock the socks off of Kalshi. In fact, one of the leading experts in angel investing has identified two insanely lucrative opportunities that could give you a 10X return within just three years.

Be sure to check your inbox. I’ll definitely be following Kalshi, and other start-ups, as they develop.

Based on regulatory filings, money raised, and where the company is as far as its technology, clearing and legal apparatus, it’s possible we’ll be betting on Kalshi, I mean everything, sometime in the next few months.

This is going to be big.

Good is another question.

Shah

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