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Launch HN: Enombic (YC S20) – Create your own stock indexes

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Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#31

Post by corry »

Love this idea. For the folks in the comments so far who are uncomfortable with the combination of "index" and "picking stocks", I think that's unfair. This is obviously a service for relatively sophisticated folks who (1) want ETFs that don't exist, or (2) want to make minor changes to existing ETFs, or (3) don't want to deal with the ETF fees/overheads for whatever reason (although presumably Enombic will have fees too).

Here's an example that came to mind:

If you were convinced psychedelic medicine is going to be huge as a sector, but also feel it's too early to pick winners/losers (and you dislike the expense overhead of PSYK) - great, make your own ETF. You still have sector risk but not 'stock picking risk'.

FYI - this is a great real example, but assumes Enomics can handle the Neo exchange (in Canada, since that's where most of the psych stocks are these days). Like, someone should post this over at /r/shroomstocks for real. :)

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#32

Post by alexeldeib »

aliquotchris wrote: post #5
endisneigh wrote: post #3

Oh god it'll be amazing once /r/wallstreetbets gets their hands on this. The $WLSTRBETS custom ticker will definitely go to the moon. I would suggest maybe putting more info on the landing page. Are you a brokerage or is this something that can hook into your existing brokerage? The latter would be awesome.

Thanks! Yes we're looking forward to getting more content on the landing page soon. For now, all the links above are public pages, so you can explore those to see some of our features. We are currently the latter; we're powered by existing brokerages, but are working to become our own.

Would you consider expanding into e.g. derivatives?

I was thinking a lot about this idea lately. An API/programmatic-first brokerage/trading platform. Let people design automated trading strategies on top of solid APIs, and use your site for visualization/planning. OptionAlpha seems to get into this but not nearly far enough. Latency wouldn't be critical either for retail investing.

I don't really understand why it doesn't exist. IB is probably the closest well known broker. There are some other smaller ones with better APIs.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#34

Post by CapriciousCptl »

How is this for tax efficiency? Is rebalancing a taxable event? Or can you rebalance without selling by just redirecting new contributions to the underrepresented issues? Over time a buy-and-hold strategy with etfs gives a large compounding bonus since taxes are deferred.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#37

Post by _eb13 »

divyahansg wrote: post #8

Awesome, would love to use this. How are you thinking about rebalancing and its tax implications?

Great to hear! Thanks!

We are exploring a few different models for rebalancing. One is to rebalance with new contributions only, another would be rebalancing with each investing (through both buying and selling), and the third would be a more tax-aware rebalancing where it only happens quarterly or annually (perhaps after you've locked in long term capital gains).

Since we lean prosumer / DIY platform, we feel like perhaps we should support a few models. Curious which you'd prefer?

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#38

Post by SilasX »

Would it be able to reproduce strategies that involve options?

I recently learned of the SWAN ETF, which captures (or attempts to) most of the S&P's return with significantly less volatility. It holds mostly Treasurys, plus options that are in the money if the S&P gains a certain percentage[1].

https://www.amplifyetfs.com/swan-holdings.html

They had to create the "S-Network BlackSwan Core Total Return Index" for it.

[1] They look to buy a year out every six months, but I can't tell for sure; it currently has SPY210618C00265000 (call at S&P = 2650 in June) and SPY 211217C00324000 (call at S&P = 3240 in December)

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#39

Post by _eb13 »

CapriciousCptl wrote: post #34

How is this for tax efficiency? Is rebalancing a taxable event? Or can you rebalance without selling by just redirecting new contributions to the underrepresented issues? Over time a buy-and-hold strategy with etfs gives a large compounding bonus since taxes are deferred.

We're exploring several rebalancing models at the moment (calendar rebalancing, constant proportion rebalancing, as well as only rebalancing with new contributions), and trying to understand which folks are more interested in. Which would you be most interested in?

Definitely want to mitigate tax burden. Additionally, the direct indexing model does allow for more flexibility around loss-harvesting.

Re: Launch HN: Enombic (YC S20) – Create your own stock indexes

#40

Post by aliquotchris »

hemloc_io wrote: post #29

I've actually been working on a small side project related to open source finance, so this is super cool to see and I'm very excited to use it! This seems like a great tool for use in trading communities etc. I think that using github-esque features feels like a good in-between from the crazy gamification of Robinhood vs old and sad UX you see at most old brokers. Are you guys planning on adding options at any point…

Thanks! Couldn't agree more. On the strategies front, we have some exciting ideas in the works. Github is one of our favorite products, tons to draw on for more advanced strategy development. Glad you appreciate the analogy.

Great to hear you've been working on some things in open source finance. We love getting feedback from folks who are building in the space. Looking forward to getting you on the product.

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