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Comment by tombert | Hacker News Reader

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tombert·

Even given that, I don't see any reason I couldn't also just mimic what QQQ does with the MCP.

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Real question, where are you going to buy the swap agreements?

If you're asking about the average person, no.

I am in the "false confidence" stage of Dunning Kruger Syndrome for finance stuff, so I personally would do swap agreements, but I'm not an average case.

I realize I might have been mixing up QQQ with ultra pro QQQ… anyway, yeah, you can replicate QQQ. I was thinking of Ultra Pro QQQ.

I mean, even still, my point stays the same; if you have access to their strategies, I don't see why you can't just get the MCP to directly mimic that.

Because it is not possible for you (personally) to buy the underlying components of leveraged ETFs.

Yeah, actually I think I was getting confused on some of the terminology. It looks like you're right.

Still, as you said, just mimicking regular QQQ is achievable.

It’s achievable. It’s called “direct indexing”, and there are some extra costs associated with it, so for most investors, I think it is cheaper to get QQQ. You can flip that around with tax loss harvesting but I don’t understand that strategy and I can’t explain it.

You also don’t need AI to do this. Before AI, the main barrier to direct indexing was the amount of capital you need. That is still true.

I have enough capital to where I can do everything with the incremental share threshold of Interactive Brokers; as such I don't have to deal with the fees associated with normal direct indexing.

Sure, but I wasn’t thinking of the brokerage fees. Things like the spread.

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