Lightspeed, founded in 2000 and acquired by Lime Brokerage in 2018, is designed for the high-velocity stock and options trader. You have your choice of several platforms, including their proprietary Lightspeed Trader and Livevol X, which is designed for options traders. EZ EMS (formerly RealTick) and Sterling Trader Pro also trade through Lightspeed and incur additional monthly subscription fees. The LimeGateway web-based trading platform is also available at no additional cost.

Lightspeed saw a higher rate of new account openings and increased trading volumes in 2019 following periods of volatility. The backbone of Lightspeed’s services is stable and capable of handling every client logged in simultaneously, which is a plus in times of extreme market volatility. The zero commission phenomenon has impacted Lightspeed’s retail growth, but company representatives say that its core customers and target market understand the value and benefits of the active day trading services and technology provided.

Key Takeaways

Lightspeed is best for the dedicated frequent trader.
Lightspeed’s backbone is stable and capable of handling every client logged in at the same time.
The high account minimums ($10,000-$25,000 depending on platform) are a barrier to new traders.
Lightspeed’s commission schedule is tiered with lower per-share and per-contract commissions charged depending on volume.

Who Lightspeed Is For

Lightspeed is best for very frequent traders, as their account minimums are on the high side, but the cost of trading is very low. You won't find any planning tools or hand-holding for newbies here, but if you know what you're doing, you can make the most of the available trading tools.

Pros Explained

Customers can route their own orders to over 100 venues, including IEX and a number of dark pools.
Lightspeed's proprietary order router uses a proprietary algorithm which is designed to produce best execution by rotating through different exchanges and routes, and is exceptionally fast.
The customer service line is typically answered in less that one ring, and is staffed by professional traders.

Cons Explained

You won’t find much hand-holding or education offered, so Lightspeed is not suitable for a beginning trader.
Few creature comforts such as cash management, debit cards, or in-platform chat.
Minimum deposit to open an account is $10,000 for those who will only use the web trader, and $25,000 for customers who want to use the downloadable trading platform.

Usability

You can open a Lightspeed account on the website. During the account opening process, you create a user name (typically your email address) and enter a password. You can open an individual or joint taxable account as well as a partnership, corporate, hedge fund, LLC or trust account. U.S. citizens can also open traditional or Roth IRAs. You have to choose the trading platform you will start with while opening the account since that defines your initial deposit to fund your account.

Lightspeed's downloadable package, Lightspeed Trader, runs on your desktop and can be configured so that your favorite tools are always on top. Tools for trading stocks and options are built into Lightspeed Trader; strategies are pre-defined, plus you can send your order to almost any venue. The options-focused platform available to Lightspeed customers, Livevol X, is specifically designed for options evaluation and trading, and it is also graphically more engaging.

There is a web version of the Lightspeed Trader called Lightspeed Web Trader that is considerably simpler. Customers who want to trade futures need to use a separate platform, efutures published by CFG, which we did not review.

Lightspeed's mobile app is primarily intended for closing trades. It also provides real-time account data. You cannot trade futures on the mobile app.

Trading Experience

Trading on Lightspeed Trader is extremely flexible in terms of order types as well as time in force. Time in Force options let you pick from several options, from 30 seconds to good til' canceled (GTC). Order entry options are numerous, so you can craft your order to your exact specifications. There are dozens of defaults you can set, or you can map your order specifications to hotkeys to send them to market faster. You can set up your Lightspeed Trader layout and hotkeys so you never have to use a mouse.

Using Lightspeed Trader, you can add new tools to your layout quickly, such as LightScan, a customizable scanner that can find stocks that fit just about any technical or fundamental criteria. BlockTrades finds large blocks of stock. You can set up alerts on a tick-by-tick basis. Most Lightspeed Trader users have multiple monitors so they can keep an eye on their scans and enter orders quickly. Data streams in real time, and updates as quickly as your computer can process the data.

Options traders may prefer to use the Livevol X platform, which is geared for monitoring risk.

Lightspeed's Mobile Experience

The mobile trading platform is the same as Lightspeed Web, with the screen resizing to your device. It features real-time streaming data and all your account details but doesn’t have all the powerful analytics built into the Lightspeed Trader downloadable platform. You cannot trade futures on the mobile platform.

Range of Offerings

Since Lightspeed focuses on frequent traders, the platform is geared for stock, options, and futures trades. There is no mutual fund trading, and fixed income opportunities are limited to T-bills traded via live broker, but those asset classes are of little interest to their target market. Futures trading requires a separate account.

Stocks long and short (~6,000 on easy-to-borrow list for short sales)
OTCBB
Futures/Commodities
Futures options
Simple and multi-leg options
T-bills via live broker

Order Types

The downloadable platform offers a wide variety of order types, including the ability to create detailed conditional orders. You can also enter “if touched” orders on the Lightspeed Trader. The web and mobile platforms allow market, limit, and trailing stop orders.

Trading Technology

One of the strengths of the platform is the ability to choose a trading venue, including dark pools and super-smart order routing. Since you can select your trading venue, you can choose a venue that is best for the stock or option you are trading. Lightspeed gives you the opportunity to route your order directly to more than 20 venues, including several dark pools. You can also select the Lightspeed order router, which uses a proprietary algorithm designed to generate the best execution by rotating through different exchanges and routes. The firm's smart order router offers very fast executions. Following the Lightspeed acquisition by Lime Brokerage, customers have access to the Lime Trading Gateway, which gives clients more choices when deciding how to trade.

The proprietary order router primarily sequences orders using a sequential router, but occasionally uses spray technology. A company spokesperson tells us that the order router is primarily geared towards speed of execution but also seeks out price improvement. The firm does not track price improvement, however, though it reports payment for order flow at less than $0.001 per share. There is no backtesting or trade automation available.

Costs

Lightspeed offers a tiered commission system that benefits frequent traders. Less frequent traders can choose either a flat fee of $4.50 per trade, or a per-share rate of $0.0045 (for the first 249,999 shares per month) with a minimum of $1. Options trades start at $0.60 per contract with a minimum of $1 per transaction. There is no per-leg fee for trading options. The fees drop to $0.001 for traders who exchange over 15,000,000 shares monthly. For clients who choose to route their own trades, Lightspeed passes exchange fees and rebates through, which allows customers to control their trading costs.

The costs listed below assume the standard per-share and per-contract commission rates for Lightspeed Trader or Lightspeed Web Trader. Livevol X commissions are slightly higher.

Cost to trade 1 share is $1. The cost to trade 1,000 shares is $4.50
OTCBB commissions is $10 per transaction with no share cap
Options base commission to open and close is $0
Options per contract fee is $0.60 with a minimum of $1 per transaction
Fee for 50 contracts is $30
Covered call trade of 500 shares plus 5 contracts is $5.25
Margin interest at $10,000 balance is 7.5%. $100,000 balance is 6.5%
Accounts which fall below $15,000 must generate $25 per month in commissions or pay the difference
No account closure fee
ACAT out fee is $95
Exercise and assignment fee: $20
No deposit and withdrawal fee
Wire fees: $20 domestic, $35 international
IRA opening fee: $20. IRA annual fee: $35
Check fees: free unless overnight or Saturday delivery, which are $30
Price per futures contract open and close is $0.60 per contract per side
Software access fee for Lightspeed Trader is $130 per month, reduced based on trading activity
No ETFs trade commission-free
Live broker trading is available for an additional $20 per transaction
Paper statement fee: $5
Paper confirmation fee: $2

How This Broker Makes Money From and for You

Lightspeed stayed out of the zero-commission scrum, not making any changes to their relatively low fees during 2019 when so many others went to zero. Their fees are comparable to what Interactive Brokers charges for its Pro service.

Interest on cash: No interest is paid on cash balances, so Lightspeed earns some interest on uninvested cash.
Stock loan programs: Lightspeed can also earn revenue loaning stocks in your account for short sales—with your permission, of course—and it shares that revenue with you. The firm did not provide us with any details of potential earnings from their stock loan program.
Payment for order flow: Lightspeed engages in payment for order flow (PFOF). This is the practice where a broker accepts payment from a market maker for letting that market maker execute the order. Its PFOF practices earn it less than many mainstream brokers since its order router focuses on speed of execution.
Portfolio margining: Lightspeed clients who qualify can apply for portfolio margining, which can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions.

Account Amenities

Lightspeed clients who qualify can apply for portfolio margining, which can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions.
Lightspeed shares the revenue it generates from its stock loan program, but does not allow clients to choose which stocks in their portfolios can be loaned out.
Uninvested cash earns no interest.
Lightspeed clients are not automatically enrolled in cash sweep programs.
Dividend reinvestment is not available since Lightspeed focuses on frequent traders.

Research Amenities

Lightspeed Trader has a highly customizable live market scanner to help you screen for current trading opportunities. The flagship platform has customizable charting with 20 years of historical data available. TipRanks, which allows clients access to analyst recommendations while ranking the success rate of those analysts, is integrated into the Lightspeed Trader front end to help drive trade idea generation. It can also be found in the client center on Lightspeed's website, allowing analysis access for all clients regardless of trading platform.

Frequent options traders who use the Livevol X platform will be able to access a wide range of options analytics and trade idea generation features.

Portfolio Analysis

The platform is designed for high-velocity traders, and as such, it has limited portfolio analytics. There are a variety of tools that help you stay on top of your daily profit and loss, and buying power statistics are maintained in real time. Performance reports track profit and loss by underlying symbol for both equity and options trades. Most high-frequency traders dump their daily transactions out to Excel for further analysis.

Education

There is some limited education on Lightspeed's website that goes into detail on various trading strategies, charting them and explaining what they are and how they work. You can find details of futures contracts under Resources, and options trading education from the OIC is offered as well. Many third-party services such as newsletters and webinars are offered for free, while premium services like multi-day courses are offered at a discount. This is not the place to go for basic trading education, however.

Lightspeed has a relatively active Twitter presence, posting market statistics and technical breakouts fairly frequently through the trading day.

Customer Service

Telephone service is available as follows: General Support from 8am to 5pm ET. Trade Desk is open 4am to 8pm ET. Futures support available 23 1/2 hours per day, M-F.
No online chat.
Live brokers available during trading hours.
Hold time is less than 10 seconds; phones are typically answered immediately.

Security

Two-factor authentication is available for Lightspeed Trader.
Biometric entry for mobile app is not available.
Excess SIPC coverage of up to $2,500,000 per account is carried by Lloyd’s of London.
No significant breaches reported in https://www.idtheftcenter.org/ during 2019.

Our Verdict

Lightspeed is a terrific fit for very frequent traders, offering customizable trading tools, flexible order types, and a choice of trading venues. Its flagship platform, Lightspeed Trader, can be endlessly customized. This is not the place for the beginning or even an intermediate trader. Once you grow out of your current mainstream web platform, if you're considering becoming a professional trader, take a look at Lightspeed.

Compare Lightspeed

Lightspeed is a perfect fit for investors who are cost-conscious and actively trading. See how they compare against other online brokers we reviewed.

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