Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

news.ycombinator.com

Post reply on HN
Print view View original

281–290 of 434 posts

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#281

Post by slt2021 »

gruez wrote: post #280
slt2021 wrote: post #272

Earlier quoted context omitted.

Citadel is basically counterfeiting shares, just like the Fed is printing dollars. its a scam and is a reason how Citadel makes $30,000,000,000 profit per year

>its a scam and is a reason how Citadel makes $30,000,000,000 profit per year Where are you getting "$30,000,000,000" (billion) in profit? Wikipedia says they only made $6.3 billion in revenue in 2023. Moreover, they were in existence for 22 years. Even if they only started "counterfeiting shares" in 2021, $30B in profit per year (so $90B in the past 3 years) seems absurd for only $60B worth of "counterfeiting shares…

  Citadel gross trading profit totalled $28bn last year,
https://www.hedgeweek.com/citadel-makes-record-16bn-profit/#....

60B is a balance at a specific date 12/31/2022, they trim the balance by the EOY and harvest losses.

the average balance is much bigger and fluctuates heavily given market demand.

UPD: I stand corrected, the market making arm only made meager $5,000,000,000 for the 6 months, so more like 10,000,000,000/year, not 28

https://www.nasdaq.com/articles/citadel-and-jane-street-set-...

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#282

Post by hn_throwaway_99 »

1oooqooq wrote: post #247
hn_throwaway_99 wrote: post #223

Earlier quoted context omitted.

In the US, not that I'm aware of. I suppose it would be possible to add a "poison pill" ("If we change this, we'll pay everyone $X dollars") to then just make it a normal contract, but again essentially no company would be willing to do that because it extremely limits their options. Also, "forever" is a lot shorter than people think, it's only as long as the powers-that-be are in a position to enforce a contractual…

nonsense. there's millions of ways. one is to be upfront about it on every advertisement and service description... can't get any easier than this. and is as effective as the complicated canary shenanigans.

> one is to be upfront about it on every advertisement and service description

Did you even bother reading the thread? What happens when your company gets sold, and all the old promises are thrown out the window? This has happened many times before (just ask Palmer Lucky about Facebook logins for Oculus), and that is what people are asking is preventable, and your suggestion does nothing to solve that problem.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#283

Post by hn_throwaway_99 »

jjmaxwell4 wrote: post #216
hn_throwaway_99 wrote: post #16

I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you. It says my money would be SIPC insured, which means if anything goes missing (obviously not through loss of equity value, but through missing funds or a ledger bug), I get my money back, up to the SIPC limit, right? I just want to ensure this isn't the same situation with fintechs that say yo…

If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.

> SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.

I thank you for being upfront and honest about this. The tough spot you'll find yourself in, then, is that if any money goes missing between you and Apex, customers are completely SOL. This is not a theoretical risk, this is exactly what happened in the Yotta/Synapse fiasco. Even if I trust that you guys are much better technologists than Synapse, would I be willing to take that risk for a teeny, teeny reduction in fees compared to an index ETF? Sorry, not for me.

EDIT: Wanted to put an edit up here so that it doesn't get lost. Thanks for your response below - for me, that was the critical information I needed, that I can directly verify that my SIPC-insured funds are held by the SIPC-insured entity. That was indeed not the case with Yotta/Synapse (and, indeed, most fintechs who keep customer funds in an FBO account at a partner bank), so I really appreciate the clarification. FWIW, I think it might be worth it to add a small blurb in the "SIPC Insured" section saying that your insured funds can be verified at any time.

Kudos, you guys have thought through a good deal of the important details, and sufficiently assuaged my concerns.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#284

Post by drewbitt »

tippytippytango wrote: post #179
hn_throwaway_99 wrote: post #104

Earlier quoted context omitted.

Yeah, FWIW I think their disclosures look good, but I want some explicit reassurance. I want to ensure "in your name" is not the same thing as "for benefit of". The thing that actually gives me the most reassurance is that they say definitively that they are a Registered Investment Advisor. In the Synapse situation, all the regulatory agencies were essentially saying "not my problem" because Synapse itself wasn't cov…

Fintech needs a lot more regulation if people are having to worrying about this kind of nuance to engage with the business.

I lost thousands of dollars with Snyapse's collapse, and there's still no update on getting any money back. It is a real concern, and something many are pushing on to regulate + rule over, but so far there's no bite.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#286

Post by gruez »

slt2021 wrote: post #281
gruez wrote: post #280

Earlier quoted context omitted.

>its a scam and is a reason how Citadel makes $30,000,000,000 profit per year Where are you getting "$30,000,000,000" (billion) in profit? Wikipedia says they only made $6.3 billion in revenue in 2023. Moreover, they were in existence for 22 years. Even if they only started "counterfeiting shares" in 2021, $30B in profit per year (so $90B in the past 3 years) seems absurd for only $60B worth of "counterfeiting shares…

Citadel gross trading profit totalled $28bn last year, https://www.hedgeweek.com/citadel-makes-record-16bn-profit/#... . 60B is a balance at a specific date 12/31/2022, they trim the balance by the EOY and harvest losses. the average balance is much bigger and fluctuates heavily given market demand. UPD: I stand corrected, the market making arm only made meager $5,000,000,000 for the 6 months, so more like 10,000,000…

"Citadel Securities is a separate entity from the hedge fund Citadel LLC"

https://en.wikipedia.org/wiki/Citadel_Securities

The market maker boogeyman is Citadel Securities, not Citadel LLC.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#287

Post by chasebank »

hn_throwaway_99 wrote: post #98
chasebank wrote: post #64

Earlier quoted context omitted.

IIRC, FDIC only covers the deposits if the underlying bank fails, not the fintec layer built on top of it. Please correct me if I’m wrong.

That's literally exactly what I wrote in my comment.

Either coffee hadn't kicked in yet or an edit on the parent? Not sure but I definitely missed it. Probably the coffee.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#288

Post by WiSaGaN »

wrsh07 wrote: post #25
dayone1 wrote: post #11

1) 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…

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

It's not. Centralization of liquidity is better for everyone. HFT thrives on fragmentation of liquidity. HFT is not wrong, but fragmentation of liquidity is.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#289

Post by WiSaGaN »

I don't really see the need to optimize on 0.03% fee of index ETF such as VOO or VTI. There are much more important things like liquidity, tracking error in whether a ETF is worth buying. Not paying reasonable fee on a service just guarantees some other nefarious ways to get back sooner or later.

Re: Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

#290

Post by _benj »

Hi, and congrats on the launch!

I'm curious about how this service compares to, say, the offerings of zero expense mutual funds from Fidelity of Schwab? I guess there's a lot more variety since I don't think those brokers have 50+ indexes.

Have you found or might expect to find liquidity issues or spread costs with fractional shares? I imagine that if you have an account with, say, $3000 that is trying to implement S&P500, the portfolio will me mostly if not exclusively fractional shares.

About positioning, I don't think I'd be the target audience since I just buy and hold $SPY, $VOO, $IVV. If you could convince me that I could implement, say, S&P 500 and be cheaper, more tax effective than holding those ETFs, that would be something interesting!

Post reply on HN