[old AMC] [FINRA MEME stocks] Doug Cifu on retail investors

The ecosystem for retail is incredible. We'll be releasing a study later today that really goes through what true price improvement is in Virtu on its own in 2020. Measured under any standard, provided three billion dollars of price improvement back to retail investors. An investor in this country can pick up a smartphone of any type and for no money get a better price than just about any institutional investor in this country. It's phenomenal what has happened. So I welcome the study and review of this because I think when smart people look at this and the chairman is incredibly intelligent and very diligent, they will conclude that the ecosystem really works for retail investors.

Yeah, I mean to be candid, that one had me scratching my head a little bit because I've heard that from critics of all different types and frankly the opposite is true. The brokers from which we receive orders are world-class organizations, multi-billion dollar organizations. You know their names. They protect their clients' information. We never see anything. There's zero client identification. We just get an order: 5,000 shares of Tesla, we want to buy it. It comes from a broker. We have no idea who the underlying client is, whether they sent that order today and five minutes later they're saying this. We have no clue. There's zero information. In fact, the market maker is at an informational disadvantage because we're just sitting there two-sided all day with across 200 different brokers saying send us your orders; we have to take them when they're market orders; we can't reject them. So the informational asymmetry is actually against the market maker. I really, really look forward to demonstrating that the narrative somehow that we're Facebook and we have this information advantage is just categorically false.

Look, we welcome competition. In fact, 40% of the retail orders that are sent to Virtu we don't internalize them; we actually try to reflect them on exchanges. We try to get liquidity. We reflect non-marketable limit orders on exchanges. And if there was more midpoint liquidity on exchanges, I'll tell you what, Bob, it would save us hundreds and hundreds of millions of dollars of both price improvement and exchange fees. So we'd be happy to have more partners that would post liquidity at midpoint on exchanges. We welcome that. My friends at Citadel have said the same thing in public testimony. So this isn't about lack of competition. There are eight wholesalers, there's 13 or 14 or 15, I lost track. National securities exchanges, there's 40 dark pools. All of us are trying to compete for those retail orders. The retail brokers are really smart; they're incredibly sophisticated, they're multi-billion dollar organizations with as much technology as one could buy. They send orders to all 60 to 70 of us depending upon where they think they can best get best execution. That's their obligation to their client. And to suggest that somehow those gigantic institutions are somehow falling down the duty, I just don't buy it. And I know factually because I see the data that that's not correct.

Look, obviously we see the same things that everybody else would see, which is it's driven off of momentum and significant momentum. The one thing that I would say is we have two sides to our business: we have a retail business and an institutional business. It should not be lost on people that this is not solely a retail phenomenon. There are meaningful professional traders that are engaged in trading both in the cash equities market and in the options market. And that's what our markets are for. We should be here to make that as frictionless and as transparent and as reasonable as we possibly can. That's our job and that's what we do every day. But this is not solely a band of retail traders trading these stocks. There's a lot of institutions and professional traders, speculators, whatever you want to call them, engaged in this in both the cash equities market and the options market. We want to make sure that there's appropriate suitability, people actually know what they're doing and they get full transparency, but otherwise that's what markets are here for, and they're functioning quite well.