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

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

#311

Post by TeaBrain »

wbl wrote: post #296
TeaBrain wrote: post #175

Earlier quoted context omitted.

It's more like paying for the privilege of operating a monopoly on poker tables, with the guarantee that the rake will be kept low, so that the operator is not competing with other entities for the customers' rake. A market maker's competition to collect the spread is with other market makers, just like a casino's main competition to collect the customer's rake would be a different casino.

Read Reg NMS before you opine on this. It's short!

As long as the market maker is executing orders at the NBBO on their ATS, they shouldn't be in conflict with Reg NMS, even though they are the only operator with the ability to market make on their ATS. Paying for order flow allows market makers to avoid competition in capturing the spread at the NBBO, however small the spread may be, while also helping to guarantee liquidity to capture the spread on, by giving them the sole privilege to market make on those orders.

Returning to the earlier poker table analogy, I mentioned that the operator with a local monopoly on poker tables, would be required to keep their rake low to keep their local monopolistic privilege, as an analogy to how market makers also have to keep their spreads in line with the NBBO (due to Reg NMS), in order to keep their privilege of executing orders on an ATS.

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

#312

Post by DeRock »

beryilma wrote: post #269

> We handle all the management, including rebalancing and tax-loss harvesting—proactively selling losing stocks to potentially save on taxes - For a non-retirement portfolio, isn't rebalancing is a taxable event? Rebalancing by selling stocks and buying others is not the best approach. Isn't it better to rebalance by shifting the focus of new investments based on a strategy? - I think it is misleading to present tax-…

This is the question I have too. The ability to create a "custom" ETF is highly desirable to me. I don't want to trade individual stocks, but instead would rather input some weightings on top of existing indexes (i.e buy less of stock A, more of stock B, etc.). However, my understanding of ETFs is that they are able to rebalance through "in-kind" creation/redemption in order to avoid creating a taxable event. I'm not sure how this is possible to scale to a custom one-off fund...

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

#313

Post by slt2021 »

wbl wrote: post #303
slt2021 wrote: post #274

Earlier quoted context omitted.

they can keep failure to deliver forever until the market moves in their desired position to actually send orders to lit market. they use derivatives and heavily recycle buy/sell shares to keep kicking the FTD can down the road for as long as the market returns to their desired position.

No they can't. They can keep a short position but that isn't failure to deliver.

the T+1 timer can be easily reset every day, until the market price reverts back to the Citadel's modeled price at which it is profitable/least losses for them to send order to lit market

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

#314

Post by jjmaxwell4 »

DeRock wrote: post #312
beryilma wrote: post #269

> We handle all the management, including rebalancing and tax-loss harvesting—proactively selling losing stocks to potentially save on taxes - For a non-retirement portfolio, isn't rebalancing is a taxable event? Rebalancing by selling stocks and buying others is not the best approach. Isn't it better to rebalance by shifting the focus of new investments based on a strategy? - I think it is misleading to present tax-…

This is the question I have too. The ability to create a "custom" ETF is highly desirable to me. I don't want to trade individual stocks, but instead would rather input some weightings on top of existing indexes (i.e buy less of stock A, more of stock B, etc.). However, my understanding of ETFs is that they are able to rebalance through "in-kind" creation/redemption in order to avoid creating a taxable event. I'm not…

You are correct the in-kind creation/redemption pushes any taxable gains/losses to the trading of the ETF by the holder, not the ETF itself.

But there are some benefits to doing what you refer to as a "custom one-off fund". Namely we can Tax Loss Harvest any losses and realize those to offset gains we realize in the name of rebalancing. The industry generally calls this direct indexing and wealth clients with $1M and above portfolios have been doing it for years.

We also provide the option of entering a "Buy & Hold" optimization for strategies, which would not rebalance your winners into losers and realizing any gains or losses, but your portfolio will drift over time if you choose this.

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

#315

Post by [deleted] »

FactKnower69 wrote: post #245
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…

>I'm just really, really wary of new fintech products to save like .3% on fees off by an order of magnitude, you're saving 0.03% on fees

[deleted]

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

#316

Post by toast0 »

slt2021 wrote: post #313
wbl wrote: post #303

Earlier quoted context omitted.

No they can't. They can keep a short position but that isn't failure to deliver.

the T+1 timer can be easily reset every day, until the market price reverts back to the Citadel's modeled price at which it is profitable/least losses for them to send order to lit market

What are the mechanics of that?

Let's say I buy a share of F on Monday, my brokerage routes it to Citadel, because PFOF.

On Tuesday, I expect to get a share of F delivered at close of business, because T + 1.

If Citadel doesn't deliver on Tuesday, what happens?

Are you suggesting they would continue to not deliver the share I purchased for several days, by saying oh yeah, we'll get toast0 his shares tomorrow? That would be pretty upsetting, and I imagine I'd call my brokerage and ask them why they're dealing with Citadel if they never deliver shares on time.

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

#317

Post by eagleinparadise »

bboygravity wrote: post #253
jjmaxwell4 wrote: post #216

Earlier quoted context omitted.

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.

Search keywords: Apex clearing and trade 385. They're basically criminals. A guarantee by Apex is worthless IMO.

Alright, I did the google search based on your incendiary comment and whatever you're trying to suggest does not seem to be the case.

pg 79: https://democrats-financialservices.house.gov/uploadedfiles/...

"Apex provides these same clearing services to many other introducing brokers, including Ally Invest, Betterment Securities, M1 Finance, Marcus by Goldman Sachs & Co., SoFi Securities, Stash Capital, Tastyworks Inc., TradeZero America Inc, and hundreds more"

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

#318

Post by camel_Snake »

dmoy wrote: post #295
deathanatos wrote: post #293

Earlier quoted context omitted.

This is always the answer that gets posted. AIUI, though, the decent-interest-rate accounts are only available from online-only banks, and as recently as last year, I was required to visit a branch (…3, as it was…) in order to conduct some transactions, largely due to credit cards having a daily limit. (I also sort of loathe the idea of needing to continually update a bunch of ACH information every year while I chase…

Fidelity can get you a better rate with their treasury money market, which works for Bill pay / etc. They have branches in most major US cities I think.

seconding. Recently transitioned to fidelity's cash management account and have done a cash advance on the debit card at a local, non-affiliated bank with 0 fees involved.

Checks the boxes for me, personally.

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

#319

Post by fancyswimtime »

bboygravity wrote: post #253
jjmaxwell4 wrote: post #216

Earlier quoted context omitted.

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.

Search keywords: Apex clearing and trade 385. They're basically criminals. A guarantee by Apex is worthless IMO.

we gettin a fan made doco on it, https://www.youtube.com/watch?v=opDJq1fnoRM

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

#320

Post by kccqzy »

koolba wrote: post #233
kccqzy wrote: post #201

Earlier quoted context omitted.

Retail brokerages earn most of their money from uninvested cash from their customers. An easy strategy is to force customers to keep a few percent of AUM as cash.

And savvy investors avoid those platforms or manually move their cash holdings into money market funds. Requiring people hold some minimum cash amount is just charging a fee with more steps involved. And even the larger offenders of that approach are in the crosshairs: https://news.bloomberglaw.com/securities-law/wall-street-gia...

Yeah I'm in the latter camp where I manually move to money market funds. I don't avoid these platforms because I treat the uninvested cash as a checking account: my bills are paid through this account. I feel better comparing it against a regular checking account that pays zero interest.

To be frank, I do not think it should require people to hold some minimum cash amount. Rather, the brokerage can require that buying securities with this reserve cash should be manual, and not automatic. That still gives savvy investors a way to do it manually.

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