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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

#51

Post by short_sells_poo »

I'm unsure how you are proposing to build a sustainable business with such low fees. Assuming you need say 5 full time employees to run something like this somewhat robustly, and back of the envelope your expenses are say 2 million a year (which doesn't afford you to pay anyone particularly well), you'll need a 160k users (!) and you are only breaking even. And you have no chance in hell to provide decent support for that many users in an area as gnarly as finance. You'll be facing a firehose of support requests all the time.

I'm sorry to sound negative, I really wish you all the best, but even from your post it looks like you had little to no idea what you are doing when you started this (you didn't know stock tickers are ephemeral?). And yet you are asking people to trust you with their money? With the only selling point being that you seem to be unsustainably cheap? What made you decide that you have the knowhow to do this well and safely?

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

#52

Post by coldpie »

jjmaxwell4 wrote: post #42
coldpie wrote: post #20

I'm not super well versed in how investing stuff works, so sorry if I get some words wrong. This isn't a fund I'd be able to purchase from my existing brokerage/retirement accounts, right? I would have to actually give my real money to you (via "Apex Clearing," who I've also never heard of & doesn't even have a Wikipedia page) to hold & manage? Even in the best of times, it'd take quite some convincing for me to give…

You are correct in your understanding. Apex Clearing's website is here: https://apexfintechsolutions.com/ They have 19M brokerage accounts and a lot of brands you've heard of got their start with Apex (Robinhood, Wealthfront) We're US based and regulated a RIA by the SEC.

I've never heard of Wealthfront, and I know Robinhood mostly for exploiting low-info customers & trying to make investing even more like gambling than it already is[1]. Pretty gross company to be keeping IMO.

[1] https://www.velaw.com/insights/game-over-robinhood-pays-7-5-...

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

#53

Post by taway789aaa6 »

shred45 wrote: post #44
taway789aaa6 wrote: post #34

Earlier quoted context omitted.

The "farce" is that when a market maker like Citadel purchase your order flow, the orders are typically not routed to the lit market (e.g. NYSE, IEX, etc) but instead routed to "alternative trading systems" (ATS) e.g. "dark pools" where your purchase has no effect on the price of the security. This breaks the whole idea of a "market" where every buy puts upward pressure on a price and sales put downward pressure. Thu…

Order flow in dark pools does impact the price of a security. The market maker will eventually need to trade out of that position. If there is aggregate buying pressure in the dark pool, they will adjust their quotes in both dark and lit markets.

> The market maker will eventually need to trade out of that position

This is why Citadel has $60+ billion dollars of "securities sold not yet purchased" on their financial statements.

They have sold $60+ BILLION of shares to investors and not yet bought the underlying securities.

So when exactly will that $60 billion of buy pressure hit the market?

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

#55

Post by short_sells_poo »

ramon156 wrote: post #50
taway789aaa6 wrote: post #41

Earlier quoted context omitted.

Ah yes, the old "we'll buy stocks for you and then turn around and lend them out to short sellers that actively want you to lose money. Promise we care about you!" I do not trust any institution that makes money off of lending MY shares out to predatory short-sellers who's sole purpose is to decrease the value of MY shares.

Sorry if this sounds uninformed, but what is the alternative? Even the bank and pensions gamble with your money, its how they move. I wish it wasn't the case either

The bigger issue is that it's basically just well hidden fees. You can add a decent amount of income to your portfolio by lending out the stocks to short sellers. Particularly in a market crash, the fees for borrowing stocks skyrocket (can easily be in high double digit %). Good firms allow you to lend out your stocks and give you the fees. Less good firms claim to give you a very cheap deal, but then basically shaft you by claiming these benefits for themselves.

If this business proposes to be profitable by harvesting the borrow fees, then them being cheap is really disingenuous because they give you with one hand and take from you with the other.

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

#57

Post by shred45 »

taway789aaa6 wrote: post #53
shred45 wrote: post #44

Earlier quoted context omitted.

Order flow in dark pools does impact the price of a security. The market maker will eventually need to trade out of that position. If there is aggregate buying pressure in the dark pool, they will adjust their quotes in both dark and lit markets.

> The market maker will eventually need to trade out of that position This is why Citadel has $60+ billion dollars of "securities sold not yet purchased" on their financial statements. They have sold $60+ BILLION of shares to investors and not yet bought the underlying securities. So when exactly will that $60 billion of buy pressure hit the market?

I don't think this really tells you anything, and it also will impact the quotes they are making, even if they are holding the position for now.

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

#58

Post by aquigley »

Cool product! But I would love for this to have a decentralized backend using tokenized assets as the securities. It would help me solve the trust issue with yet another new FinTech startup and then I wouldn't mind letting you collect the PFOF if I could swap out backends if needed. Or can let the community develop the best strategies/factor tilts/tax alpha for each individual's unique situation.

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

#59

Post by jjmaxwell4 »

taway789aaa6 wrote: post #47

> The Firm assesses fees monthly, in arrears. Fixed fees are $20/month, in arrears. Fees are debited directly from client accounts. If the fee is $1/month, why does your form ADV state that fixed fees are $20/month? https://double-disclosures.s3.amazonaws.com/Double+Finance+A...

This is an older version of our Form ADV - we're fixing this now. We've updated our ADV with the SEC but this link remains attached to our older one.

This is our current latest filed with the SEC:

https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_ia...

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

#60

Post by gruez »

taway789aaa6 wrote: post #53
shred45 wrote: post #44

Earlier quoted context omitted.

Order flow in dark pools does impact the price of a security. The market maker will eventually need to trade out of that position. If there is aggregate buying pressure in the dark pool, they will adjust their quotes in both dark and lit markets.

> The market maker will eventually need to trade out of that position This is why Citadel has $60+ billion dollars of "securities sold not yet purchased" on their financial statements. They have sold $60+ BILLION of shares to investors and not yet bought the underlying securities. So when exactly will that $60 billion of buy pressure hit the market?

>This is why Citadel has $60+ billion dollars of "securities sold not yet purchased" on their financial statements.

1. source?

2. supposing this is true, what's their daily turnover? "60+ billion" sounds like a lot, but if that's their daily turnover that shouldn't be anything out of the ordinary.

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