RE: a question asked of Ken Griffin last week (RE: market-makers)
for someone who doesn't know how all the plumbing works in this process, i had a question about this exchange between Ken Griffin and Rep. Sherman:
"Is the Robinhood customer getting the same price as the Fidelity customer?" Sherman asked Griffin.
"Congressman, I believe that's an excellent question," Griffin responded. "The execution quality that we can provide as measured by terms of price improvement is heavily related or correlated to the size of the order we receive."
Sherman interrupted him, saying he was asking a clear question: If the orders are the same size, is it not true that one (Fidelity) is getting a better price?
Griffin wouldn't say: "Because the Robinhood community tends to be smaller in quantity..." Griffin started before getting cut off again.
"You're evading questions by making up other questions," Sherman shouted.
"The quality of execution varies by the channel of order," Griffin said. "Channels matter."
"Who gets the better deal -- a broker who pays for order flow or one who doesn't?" Sherman asked.
"Size of the order is only one factor," Griffin insisted.
what's the actual answer to this and why?
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