Are you registered with the SEC as an investment fund?
Edit: Thanks, answered earlier in comments.
Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
151–160 of 434 posts
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#1521) are you going to sell your trade flow to Citadel / market makers like Robinhood and your competitors do? That's the dirty secret way of making money that you seem to have completely excluded. The reality is that adds up to substantial "invisible" fees that the investor has no transparency over because you sell your trade flows to them and they make a higher than normal spread. And the whole "doesn't matter if we s…
I dont know the reasoning behind this comment, but YC isn't a charity. The investment was made with the hopes of making 100x return without customers paying fees. Obviously there are other cashflows in play
Maybe they are expecting for an exit from a company buying them and then raising fees
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#153Earlier quoted context omitted.
Pfof is woefully misunderstood In general, citadel wants to pay to trade with retail investors because it knows it isn't going to face adverse selection. So it will give them tighter bid/ask ratios (this is better for the customer) than they would get if they were trading in the open market, citadel isn't going to get hosed by one of them (because there's no adverse selection) It's win win win
> PFOF and excessive off-exchange trading persist because so many trading platforms rely on the revenue it generates, essentially productizing their clients. Defenders of PFOF have claimed that retail brokers who route to high-speed traders (in exchange for PFOF) provide better price execution for investors and that it’s a net positive, despite creating an inherent misalignment between these platforms and their custo…
I think you're only highlighting my point that it's woefully misunderstood
The fact that 70k people signed a statement making a bunch of strong but vapid claims is umm telling
Let's take a longer money stuff excerpt:
>>> Some retail brokerages seem to make a lot of their money from payment for order flow. Others make less. Some big retail brokerages do not accept any payment for order flow at all: They still use this system (routing their orders to market makers), but they take 100% of the value in the form of price improvement for their customers instead of payments for themselves. Intuitively, you might think that the brokerages that get a lot of PFOF would get worse price improvement.
But, nope! Here is Bill Alpert in Barron’s:
Critics of retail brokers like Robinhood Markets condemn those companies for routing customers’ orders to market makers like Citadel Securities in exchange for payments. ...
The suspicion is that greater payments to brokers must be offset by less favorable execution prices. But that isn’t what a new study finds.
In an Aug. 13 working paper, five finance professors analyzed 85,000 stock trades they made through five leading retail brokers. They did get significantly different pricing through different brokers for identical orders to buy or sell at the current market price.
But their best pricing came from a broker that takes payment for order flow, namely TD Ameritrade, now a unit of Charles Schwab. Fidelity, which takes no order payments, got worse prices on the professors’ trades than did TD Ameritrade. And its prices were no better than those from the E*Trade unit of Morgan Stanley, which does take payments. Robinhood, which used revenue from order-flow payments to subsidize the industry’s first commission-free trading, delivered middle-of-the-pack pricing. Interactive Brokers ranked last in the execution pricing of the professors’ orders.
That's from https://news.bloomberglaw.com/mergers-and-acquisitions/matt-...
Excerpted Barron's: https://www.barrons.com/articles/payment-for-order-flow-sec-...
Paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4189239
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#154This looks great. I'm usually very much a DIY type of person when it comes to investing because of the typical fees mentioned, but excited to try this out!
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#155Earlier quoted context omitted.
Pfof is woefully misunderstood In general, citadel wants to pay to trade with retail investors because it knows it isn't going to face adverse selection. So it will give them tighter bid/ask ratios (this is better for the customer) than they would get if they were trading in the open market, citadel isn't going to get hosed by one of them (because there's no adverse selection) It's win win win
> PFOF and excessive off-exchange trading persist because so many trading platforms rely on the revenue it generates, essentially productizing their clients. Defenders of PFOF have claimed that retail brokers who route to high-speed traders (in exchange for PFOF) provide better price execution for investors and that it’s a net positive, despite creating an inherent misalignment between these platforms and their custo…
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Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#156I'm curious about how direct indexing impacts tax filing. You mentioned generating short term/long term capital gains numbers, which is fine, but what about all the different transactions? Won't someone using your service have to enter all of them manually on their return?
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#157[deleted]
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#158>> Over a 30-year period on a $500k portfolio, the money lost to those fees would be $1.30M for the financial advisor and $244k for the average ETF and even $42,951 for the low fee VOO. How do you calculate $42,951 for VOO? Seems too high on 500k, or at very best you are conflating FV and PV and comparing apples to oranges. First year is going to be $150. Last year is going to be maybe 2^3 * 500k * 0.03 = $1200? I'm…
The calculation is at https://double.finance/pricing
They are assuming an additional $2000 contributed per month and a 7% return.
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#159Congrats on the $10M in AUM. I do really like how simple the website is to understand and the pricing is quite attractive (assuming it stays at $1/mo).
A couple typos you might want to fix: https://triplechecker.com/s/840785/double.finance
Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios
#160So a “typical” ETF costs me about 0.15% year, or around $150 for every $100k I have invested. While $12 per year would certainly save some money, it’s coffee money vs. life savings money. I think you’re going to have a hard time convincing me to move from offerings from companies like Barclays, Schwab, or Vanguard. Plus, zero fees doesn’t save me any money unless you can stay within 0.15% of the big index funds you’r…
>Move fast and break things works great for computer startups, but if you want me to move my life savings over I need more confidence that you’re coming to be around in 40 years and still have my accounts intact.
That's exactly my opinion of this. It's fine to innovate, but when you're dealing something like life savings, long-term stability is the most important requirement that comes to mind. Anyone building an investment firm on VC money is immediately suspect, because VCs don't particularly care about long-term viability.