October 7, 2018

Lightspeed Trading Review: Is It Good?

What are the two things you think of when looking for a discount broker? If you are like most people, it's low commission fees and an assortment of online tools. If you are a day trader, though, you have different needs. You need a fast-acting platform with low costs. That's what Lightspeed Trading claims to offer.

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Lightspeed Trading keeps things simple. You won't find a large number of features. Instead, you'll find instant order execution, software to handle your speedy orders, and competitive fees.

That's not to say Lightspeed doesn't offer some tools, because they do. The tools cater to the frequent trader, though, not the infrequent, low volume trader.

If you are a day trader or are thinking of trying your hand at day trading, keep reading to see if Lightspeed may offer what you need.

How Does Lightspeed Trading Work?

Lightspeed can be categorized as a "discount broker." Their fees are lower than a full-service broker's fees and you are in charge of your investments. In other words, you don't have a financial professional handling them for you. But again, Lightspeed isn't your typical discount broker.

Lightspeed offers services to institutional and retail investors. If you are an individual, you are a retail investor. What does that mean for you? If you are up for it, you can have some powerful investment tools at your disposal with Lightspeed.

Investors can trade stocks, options, and futures, but only on certain platforms. Lightspeed doesn't offer bonds, options, or mutual fund investments, though.

Lightspeed offers five platforms, but only two are for retail investor use. The LS Trader and Web/Mobile Trader are the two available for non-professional use. However, only the Web/Mobile platform works for the occasional investor. The LS Trader is Lightspeed's flagship offering, but it's reserved for the active investor, aka day trader.

What's the Minimum Deposit Required? Lightspeed requires a minimum $25,000 initial deposit for both the LS Trader platform and the Web/Mobile platform. The only exception to the rule is for those investors not participating in day trading on the Web/Mobile platform. Occasional investors can make a $10,000 minimum investment to get started.

How's the Platform?

Lightspeed Trader was created with day traders in mind. It provides real-time quotes, fast order execution, and a wide variety of trading tools. As a day trader, you can customize your dashboard to meet your needs. Whether you prefer to set up "hot keys" for fast order execution or you would rather point and click, you can set your settings to meet your preferences.

The LS Trader can process complex options trades and offers a variety of scanners and filters to help you make the platform suit your needs.

How's the Mobile App?

The Lightspeed Web/Mobile platform, as the name suggests, operates solely online. But, investors get a sophisticated system they can use on the go and they don't have to pay a monthly software fee. The Web/Mobile platform offers real-time streaming quotes and makes order entry simple. You can even access advanced market data in this platform, right from your phone. The mobile app allows you to access your portfolio, make trades, enter advanced orders, and view charts, all in real-time.

Download Link for Lightspeed Trading: Lightspeed gives you the chance to try their LS Trader program free of charge. First, you must provide your first name, last name, and email address. You can then download the program. Lightspeed will provide you with login information via email, so make sure you watch for it. You can then conduct "mock trades" in the demo based on real-time past information. You'll also have the opportunity to review training videos and reference guides to help you get started.

What Are the Fees?

Lightspeed offers two pricing options: per share or per trade. They work on a tiered system, which benefits the active traders because the more you trade, the more you save. For example, if you make less than 250 trades per month, you'll pay $4.50 per trade. The cost goes down from there as follows:

  • 250 - 749 monthly trades: $4.00
  • 750 - 1499 monthly trades: $3.50
  • 1500 - 2999 monthly trades: $3.00
  • 3000 - 9,999 monthly trades: $2.75
  • More than 10,000 monthly trades: $2.50

Lightspeed also offers a per share commission structure, as follows:

  • Less than 249,999 shares: $.0045 per share
  • 250,000 - 999,999 shares: $0.0035 per share
  • 1,000,000 - 2,999,999 shares: $.0020 per share
  • 3,000,000 - 5,999,999 shares: $.0015 per share
  • Over 15,000,000 shares: $0.0010 per share

Lightspeed Trader API: The Lightspeed Trader program has an Application Programming Interface that allows traders to create their own algorithmic strategies. You'll need to know C++ programming in order to utilize this function and access Lightspeed Trader's functions.

Reasons We Like Lightspeed Trading

  • Lightspeed's trades are low-latency. Low-latency translates to "fast." The technology used by Lightspeed allows for "lightning quick" trades, helping you to maximize your chances of a profitable trade.

  • Lightspeed Trading offers a variety of educational tools. You can choose from webinars, tutorials, the Active Trading blog, or FAQs to get the answers you need about the Lightspeed Trading platforms and processes.

  • You can set up "hot keys" to get your orders executed quickly. Day traders often use "hot keys" that they define themselves. Once programmed, you can use the one-touch buttons to execute certain orders.

  • Lightspeed Trader can handle complex options trades. Options traders who like to use complicated strategies often find themselves reaching the capacity of a broker's software. Lightspeed Trader, however, can handle complex orders with ease.

  • Amateur traders have access to free market and research data from Lightspeed. Non-professional traders can have free access to the market data package provided by Lightspeed Trading. It's a value of $105 per month, as that is what Lightspeed charges the professionals.

  • Lightspeed offers users of Lightspeed Web/Mobile Trader a free market data and research package. This same package costs professional traders $105 per month, but active day traders have access to the information free of charge.

  • You talk to a licensed financial professional when you call customer service. Each representative who works for Lightspeed is a licensed financial professional. They are available for your questions via phone and internet during business and non-business hours.

  • You only need one account for multiple types of trades. You can trade stocks, options, or futures all from one account. This helps keep things less complicated when keeping track of your investments.

  • If you are a high-volume trader, you get rewarded for your volume. The price you pay per trade and/or share goes down as you climb the pricing tier. Investors need to trade just 250 shares per month to start enjoying the discount.

Reasons You May Want to Look Elsewhere

  • You need at least $10,000 to start with Lightspeed Trading. If you are a new investor or you don't have a lot of capital, you may not be a good candidate for Lightspeed Trading.

  • You are a small or infrequent investor. The pricing structure and complex platform reinforce the fact that Lightspeed is best suited for the active or professional investor. If you only invest occasionally or are just getting started, you'll want to look for a more user-friendly platform.

  • Lightspeed doesn't offer retirement tools. While you can open a retirement account (IRA) with Lightspeed, they don't offer any type of retirement calculators to help you with "what if" scenarios or help you determine how much you might need to retire.

How It Compares

  • Interactive Brokers: Interactive Brokers is another viable choice for day traders. Users can create "hot keys," have access to limited educational opportunities, and pay competitive fees. Clients of IB often feel as if they are on their own, though, as the customer service leaves a bit to be desired. If you aren't comfortable with the platform or need frequent customer service, you may want to look elsewhere.

  • TD Ameritrade: TD Ameritrade has two sophisticated platforms, but the commissions are higher than Lightspeed's fees. TD Ameritrade does offer mutual funds, whereas Lightspeed doesn't. This includes almost 300 commission-free ETFs, which Lightspeed also doesn't offer.

Bottom Line

If you are a passive or occasional investor, you'll want to look elsewhere. If you are a day trader or very active trader with at least 250 shares traded per month, Lightspeed's pricing structure and lightning quick trades may be attractive as well as beneficial to you.

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