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Macro S&P drawdown model: the false positives are the problem for hedging
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Since no one actually provided any actual facts to u/MussleGeeYem \- wealthy people and experienced educated traders don't typically use Robinhood. Brokers and investment managers regularly disclose their AUC (assets under custody) and number of accounts. You can derive the average account size. As of August, 2026 - see Robinhood disclosure here - [https://investors.robinhood.com/static-files/109c7fdf-8d1c-474a-b7db-c3ef5cecab6b](https://investors.robinhood.com/static-files/109c7fdf-8d1c-474a-b7db-c3ef5cecab6b) Robinhood's average account size based on 28.6 million funded accounts and $383.7Bn in AUC means that the average funded account size is $13,416. In contrast - if you look at a broker like Schwab - [https://pressroom.aboutschwab.com/press-releases/press-release/2026/Schwab-Reports-Monthly-Activity-Highlights-7c5bb81a9/default.aspx](https://pressroom.aboutschwab.com/press-releases/press-release/2026/Schwab-Reports-Monthly-Activity-Highlights-7c5bb81a9/default.aspx) Average Schwab account size as of September, 2026 is about $334,497 - although that includes their bank assets and not just brokerage and investment management accounts. For experienced and sophisticated traders and investors - they typically don't use Robinhood because Robinhood lacks trading services typically needed by more sophisticated traders/investors. For example - Robinhood doesn't offer staples like portfolio margin for traders, access to mutual funds and fixed income assets for diy investors. That said - this doesn't mean that a broker like Robinhood isn't used by wealthy or sophisticated investors. There are lots of services provided by Robinhood that simply caters to different demographics. Robinhood has a roboadvisor that I think can be better the offerings from the larger FI's. And there are lots of very sophisticated investors that simply use Robinhood for their tax-advantaged accounts because of the matching. I don't use Robinhood because their services just don't fit my needs but it doesn't mean that it won't fit someone else.
Yeah when they line up, the slow grind is already in the vol, so the overlay is mostly a gap ticket. The dial I'd still watch is how much premium a quiet year is allowed to eat before you shrink that baseline. Otherwise you're right, the scorecard is the carry and AUC was never the point.
This is the design, better put than I had it. A baseline hedge with the model only moving tenor or notional (or financing with a spread) when the probability and implied vol disagree kills the binary-threshold strawman I set up, and the "when they disagree" part is the whole game, because when they agree vol has already priced it. Splitting slow grind from gap risk in the evaluation is the other piece: a model that lets you take delta down into a six-month deterioration can earn its keep even if it's blind to overnight gaps, as long as you don't ask it to insure them. And after-cost carry by regime is the right scorecard. AUC was never going to survive contact with the put premium.
That false-positive accounting is the right place to be skeptical. I’d test the overlay as a portfolio policy rather than a binary alert: keep a small baseline hedge, then let the model change tenor or notional, or finance it with a spread, only when probability and implied vol disagree. Otherwise the 21 false alarms are almost guaranteed to dominate. I’d also separate slow grind from gap risk in the evaluation; a model that’s useful for reducing delta into a six-month deterioration may be fine even if it can’t insure an overnight shock. The key output for me would be after-cost carry by regime, not AUC.