Robinhood now lets your AI agents trade stocks

>LLM's can actually be exceptionally good at research and pattern recognition, i.e. analysis.

No they aren't, they're good at imitating analysis based on representations of analysis in their training data. Also, Its likely that out dated techniques would over represented in training data.

Do you think Jane Street would have the returns they do if they just imitated all their competitors and everyone was using the same strategies?

This is essentially what AlphaZero is doing: https://nof1.ai/

> LLM's can actually be exceptionally good at research and pattern recognition, i.e. analysis.

Sure but knowing where to start research is also a problem. Just saying “do research” isn’t going to work even with volumes of public information.

I mean sure an LLM can indeed have useful ML functions BUT it is a fools errand to think an LLM at the retail level is generating any alpha. Help build a model sure. Whatever these weird mechanism of agents trading, no.

This is absolutely and unfathomably terrible to such a great degree that I think it reinforces OPs point. It seems like using an LLM has given you the confidence to make an incredibly ill-informed decision that will cost you dearly.

Every single time you rebalance your portfolio, you will need to pay short-term capital gains taxes on any gains, as opposed to an ETF in which you simply pay for the gains when you sell your stock which can be years/decades from now. This alone will reduce your average expected earnings by 20% over a 10 year period eviscerating whatever tiny advantage you think you'll get from saving a few bucks in fees.

Furthermore, assuming you rebalance your portfolio monthly, which is the minimum you need to rebalance in order to remain even somewhat aligned with QQQ, you're basically going to be paying a MINIMUM of 30-40 bucks a month in commissions to Interactive Brokers, or 400 dollars a year. And on top of IBKR's commissions you then need to pay the pass through fees of about 5-10 dollars a month for a total of around 500 bucks a year.

Compare that to QQQ which only costs you 18 dollars a year for every $10000 invested.

I've read some incredibly foolish investment advise on HackerNews, but I think this one just about takes the cake.

You don't need AI for this though. I was doing something like this with a python script and a crypto meta etf I created years ago. I even had some simple heuristics for selecting what coins and quantity to purchase given trading volume and spot price. Its like 175 lines of python. Probably could be a lot leaner too.

I feel like you could probably have the AI write a script that uses the API to do the same thing, except this time you have code you can test rather than relying on the probabilistic machine every time you do a trade.

I have thought about this but snag on rebalancing, because it would create a taxable event, or be drawn out over months/years.

Although maybe a bit spicier, VGT is half the cost of QQQ, so that is what my "NASDAQ" has been. I also blend in VTI to cut the volatility a bit, which is 1/3 the cost of VGT.

This is fair use, but an average person will just spam LLM with "give me money making strat"....

QQQ gets the leverage from, among other things, swap agreements and futures. I don’t think what you have could be reasonably considered “pseudo-QQQ”. It’s like copying a cake recipe, but leaving out the flour and eggs because they are too expensive.

I love how you needed an LLM to remove "passive" from "passive investing".

On a more serious note, why do you need an LLM for this at all? It's an excel spreadsheet difficulty level task.

QQQ?

Too late to edit my comment, but some of the responses here were right; this is a actually a bad idea, at least with the naive way I was describing it. There's a lot more tax stuff that you avoid with ETFs compared to the makeshift thing I'm describing.

@dang if possible can you add this to my comment because I genuinely do not want to mislead anyone and have them repeat my mistakes.

They’re possibly great at generating alpha in highly complex systems that compose LLMs with tabular machine learning and other analytical techniques at a large scale. So yea, certainly not for these users.

Sentiment analysis has been done programmatically for at least 2-3 decades. Retail using an LLM will have no impact.

Maybe synergistic with tokenmaxxing. You should be burning more tokens, and you should also be making more trades.

well said truth

I don’t understand these arguments. You have to realize anything an LLM does has been exploited for decades by well funded shops.

That is sidestepping the point: 70-90% of retail traders lose money. The question should be: is AI trading enough of an improvement to justify its non-subsidized costs?

The humans can't either

Fidelity makes you wait a short period of time after turning-on the “stock options” setting. They also give you documents about options and how to trade them and what to look for. They also ship that same information in a booklet in the mail to you. They make a best effort to inform you of the risks and benefits. I wouldn’t call randomly placing an options bet something you would want to bypass research on…and I frankly think your line of thinking is a dangerous way of operating in the financial space. Especially where it’s critical to understand how moving your money around penalty-free works with different types of investments.

And it shouldn’t take you weeks to understand how to trade options or any of the myriad of ways you can invest.

Yes but there’s many reports of agents getting back testing to work but it never translates to real trading. It seems they tend to overfit to back testing so I’m just giving them access to Twitter sentiment, other trading data thru tools and not necessarily an algo that’s been back tested. It’s why the flash models are doing better image they have faster tps and can call the tools faster.

They were adopted by professionals long ago, and those highly tuned and validated proprietary models are going to kick the butt of the models that you have access to every day of the week.

> Not a single sane person will give meaningful amount of money to LLM for actual trading.

r/wallstreetbets enters the picture... it will happen. And if it's not the "well-regarded" WSB people, it will be someone who drank way too much of the AI kool-aid.

Robinhood (and retail in general) order flow is valuable precisely because there's already no information in it. It's assumed to be more or less random.

Institutional order flow can move the market, or be an indicator that the market is going to move in that direction. So executing against it a worse bet than executing against retail flow.

Robinhood's crypto offering is extremely deceptive. They offer "commission-free cryptocurrency trading" but don't make it clear that you pay a 0.95% fee[1] on every trade (technically a 'spread' and not a 'commission' but there is hardly a difference). They also take 25% of staking rewards. These are absurdly high fees.

1. https://cdn.robinhood.com/assets/robinhood/legal/rhc-fee-sch...

Totally.

Probably.

I believe you’re confusing access with outcomes. Giving people access to markets isn’t exploitation afaic.

If you’d like to make dubious trades that’s your prerogative and who am I to stop you.

Well, have your seen the current size of Sherwood forest

They turned Robin Hood to Robbin’ the Hood

Could this be a good thing - yes

Will it be is a different thing though. And if it’s not, who exactly is accountable?

With funds and portfolio managers that run them, there’s a clear accountability model (if the fund sucks, the manager loses their job and the company loses credibility)

With AI agents doing the management, who is accountable when the fund sucks? If it’s the customer, we’ve moved accountability from someone who at least in theory, knows what they’re doing to someone who has little to no clue.

What is the point of having a speculative market if everyone has access to the same information and capabilities? You might as well just direct deposit a proportional share of all economic growth relative to investment into every citizens account and be done with it.

> it'll say "slow down cowboy"

Maybe if you prompt it to be highly critical of you, the user.

Otherwise it will absolutely right you out of money.

I believe that your individual ability to execute an order is constrained such that some of the difference is removed. On the other hand, the overall thesis has merits IMHO

This was not due to malice but instead, incompetence. They didn’t have enough cash to clear their trades.

I have ranted on here before about the SV startup mindset of “I don’t need to know anything about the industry I’m ‘disrupting’ nor do I need to play by their rules” and this was an example of that. On that day, everybody who was actually in capital markets went, “what f-ing idiots those guys are”

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