Virtu Financial, Inc. (NASDAQ:VIRT) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 08:30 am ET

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Virtu Financial, Inc. (NASDAQ:VIRT) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Douglas Cifu

is what we -- Vinnie and I preached this from when we started Virtu in 2008 and we are still seeing from the same sheet of music which is if you are scaled and efficient you will do well. And customers whether they're retail or institutional or otherwise are going to demand efficiency and scale to your business. And so this is just a natural to me evolution of the market and it is made possible by the good services of Virtu Financial. And to give them credit Citadel Susquehanna Two Sigma or other great firms that our wholesalers or market makers in what we refer to as the 605 space. So I think -- and you know this but the lion share of what we provide and I mentioned it in the script is price improvement. So that means that we are actually providing a price that is better than the national best bid or best offer back to the retail end user of the 200 or so retail brokers that we do business with. We provide price improvement to every retail broker that we do business with period end of story. There are some of them that in addition to that will take a rebate from us right as part of our interaction with them. Everything is fully disclosed.

Everything is fully transparent. We don't have customers that are sending us orders based on the size of the rebate. We are competing with those aforementioned market-making firms based on our ability to provide price improvement. So I look at this move towards 0 commissions as further support if you will for the efficiency and the service that Virtu and our competitors are providing in this ecosystem and this ecosystem works incredibly well. So for me it really sort of buttresses our belief in that business. But obviously Rich there's only -- we run a great business here. We provide a lot of value back but there's only so many eggs in the basket. And so if our customers want to engage in the discussion about how those eggs should be allocated we're obviously open to that discussion. But certainly we're not creating more eggs at any time. And so at the end of the day I think this is ultimately a strong positive for the value that we bring and our competitors bring to the ecosystem. As I said in the script I think it is amazing. The benefits that have been brought to a retail investor to think that in 2019, you can go on a terminal or a handheld and literally for $0.00 get a price in a large-cap or medium-cap or small-cap name that's better than you could get on any exchange is just an incredible endorsement for the ecosystem that we've all created. I'm very proud of our role in that ecosystem.

Analyst
Rich Repetto

Got it. Thank you very much.

Operator
Operator

Your next question comes from Alex Blostein from Goldman Sachs. Your line is open.

Analyst
Alex Blostein

Hey, good