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Broker Reviews

Lightspeed Trading

Published by
On Tuesday, February 17th, 2015 .

Overview

Lightspeed caters to one type of investor, the hyperactive trader, and provides the tools required to succeed.

Dislikes

No support for mutual funds or bonds; no mobile trading support; $99 monthly platform fee (waived if certain conditions met).

Special Offer: Get up to $10,000 cash back - Learn More

Lightspeed Review

Feeling confused is a common experience for first-time visitors to the Lightspeed website, unless they can speak the lingo of Lightspeed's target market, the active trader.

Lightspeed is one of the few online brokers whose goal is to avoid newer investors and those with little experience. The definition of "active trader" has a different meaning at Lightspeed compared to other big names such as TD Ameritrade, ETRADE, Scottrade, and Charles Schwab. At Lightspeed, clients trading thousands of round trips per month is not uncommon.

For investors seeking retirement calculators, third-party reports, or stock education, Lightspeed has little to offer. However, those seeking top-tier executions, low prices, and speed, will find themselves in paradise.

Commissions & Fees

With Lightspeed’s clientele being active and hyperactive traders, the broker’s commission structure caters accordingly. Through the main platform, Lightspeed Trader, two tiered commission structures are offered: per share and per trade. The more volume you trade or the more frequently you trade, respectively, each month, the lower your rate will be.

With per share trading, equities trades start at $.0045 per share, plus/minus routing fees ($1 minimum). For traders who place larger orders, per share trades can be made starting at $4.50, plus/minus routing fees. Options trades start at $.60 per contract and scale down in cost according to monthly volume.

One of the important notes about Lightspeed, shared by only a select number of brokers, is that the company does not receive payment for order flow. This means far cleaner fills for clients. Also, the broker passes all respective market center rebates (or fees) to the client, allowing seasoned traders to keep costs extremely low.

By adding liquidity through using limit orders, clients receive the full market rebate, which typically averages around $.002 per share, depending on the market center. On the flip side, routing a market order to one of the major exchanges (i.e., taking liquidity) will run an additional charge of around $.003, on average.

Lightspeed TradingInteractive BrokersTradeStationMB TradingOptionsHouse
Stock Trade Fee (flat)$4.50N/A$9.99$4.95$4.95
Options Base Fee$0.00$0.00$0.00$0.00$4.95
Options Per Contract Fee$0.60$0.70$1.00$0.95$0.50
Commissions & Fees

Platforms & Tools

Lightspeed offers clients multiple different platforms to trade on. Under Lightspeed’s parent company, Professional Trading Solutions, three platforms are corporate owned: Lightspeed Trader, Lightspeed Web Trader, and Sterling Trader. The rest are third party.

For our review, we focused solely on Lightspeed's flagship platform, Lightspeed Trader, which is a desktop-based platform designed for speed, stability, and execution. While not the prettiest platform (it certainly would place last in any beauty pageant), the platform serves its purpose.

Although the learning curve is not too rough, ample trading experience is required to take advantage of all the order routing capabilities. Hotkeys are customizable down to order size, type, and routing instructions. Even the data is fed directly into the platform, showing that truly every millisecond matters to the broker and its clients.

Lightspeed platform hotkeys

Beyond placing lightning-fast trades, however, the platform has little to offer. I found the charting to be just okay, and the tools were certainly lacking. Users of TD Ameritrade's thinkorswim platform or TradeStation will feel as if they are back in the Stone Age.

Lightspeed platform charting

Furthermore, there is absolutely no research offered, and the options trading functionality, which has improved dramatically over the past several years, still lacks the quality theoretical analysis tools its competitors offer.

Overall, Lightspeed's platform is designed for professional investors to trade efficiently and do their jobs without any delays. In the world of hyperactive trading, every penny and second matters, and not having perfect fills each time is unacceptable.

Customer Service

Lightspeed offers both phone and email support. The online broker used to offer current and potential clients access to live chat support; however, the service was shut down in mid-2012.

Lightspeed's phone support is commendable – the broker consistently delivers with speedy connection times in under a minute. The same holds true for email support: every test email we sent over came back in less than one hour. Unfortunately though, one of our emails never received a response.

Overall, we found that Lightspeed support reps have a tendency to answer questions quickly and to the point, which could be explained by the fact that Lightspeed's clientele is all-business all the time. Having said that, the broker has room for improvement. Standardizing its templates could go a long way to improving the Lightspeed experience.

Other Notes

Lightspeed does not offer any mobile trading support; neither does it offer any research beyond some basic technical analysis insight. Mutual funds are not supported for trading, and the broker's educational offering is very weak, which one might expect from a broker dedicated to professional traders.

Although Lightspeed lacks more mainstream "retail" investor offerings, it thrives in its offering for complex trading. The broker's institutional arm offers algorithmic (algo) trading through its Lightspeed Trader API and black box developer kits, both often used only by hedge funds. The broker also offers grey box trading in partnership with Trade Ideas, allowing clients to create and back-test their strategies, then use Lightspeed’s API to automatically trade them.

Closing Notes

Lightspeed is not an online broker built with new investors in mind. Instead, it caters to the hyperactive trader, professional investors, and institutional investors alike, all looking for quality executions, competitive commissions, and a dependable platform built to serve one purpose: trading.


Blain Reinkensmeyer

Reviewed by

Blain has been involved in the markets for over 12 years, heading StockBrokers.com equity broker research and reviews. His personal blog, StockTradingToGo.com, provides to-the-point daily market recaps to over 17,000 subscribers.

Commission Notes

Lightspeed offers two primary trade platforms: Lightspeed Trader and Lightspeed Web Trader. The Lightspeed Trader platform requires a $25,000 minimum deposit and is designed for active traders seeking the best possible executions and data speeds. The Web Trader platform, on the other hand, requires only a $5,000 minimum deposit and is designed for low activity customers. Portfolio margin requires a $250,000 minimum deposit.

Note: As of Q4 2014, the Lightspeed Trader platform now charges a $100 software fee each month. Commission spend applies towards this fee, so if a client spends atleast $100 in commissions, the $100 fee is not applicable ($100 - $100 = $0). As another exmaple, if the client only spends $40 in commissions, they would be charged $60 ($100 - $40) for that month.

Lightspeed offers a "Per Share" pricing plan alongside a "Per Trade" plan. Throughout the StockBrokers.com website we display the Per Share rate. To request a commission plan change, clients must call in to the broker. Full commissions schedule breakdown below.

Stock Trades

  1. Standard Commissions (Per Share) - $.0045 per share ($1 minimum charge) unbundled or $.006 per share using the LSPT route which charges 15 pips (effectively converting the per share rate into a "bundled" structure). Phone orders are $20 + standard commission rate. For OTCBB trades, "Call for OTCBB/Pink sheet rates".
  2. Active Trader Commissions - To qualify for active trader commission rates, the client must contact Lightspeed first. Per Share rate (Monthly Volume): $0.0035 (Over 250,000 shares), $0.0025 (Over 1,000,000 shares), $0.0020 (Over 3,000,000 shares), $0.0015 (Over 6,000,000 shares), $0.0010 (Over 15,000,000 shares). $1 minimum charge. All trades plus/minus applicable market center fees.
  1. Standard Commissions (Per Trade) - $4.50 per trade (up to 50k shares order size) plus/minus applicable market center fees. Phone orders are $20 + standard commission rate. For OTCBB trades, "Call for OTCBB/Pink sheet rates".
  2. Active Trader Commissions - To qualify for active trader commission rates, the client must contact Lightspeed first. Per Trade rate (Monthly Volume): $4.00 (Over 250 trades), $3.50 (Over 750 trades), $3.00 (Over 1500 trades), $2.75 (Over 3000 trades), $2.50 (Over 10,000 trades). All trades plus/minus applicable market center fees.

Options Trades

  1. Standard Commissions - $.60 per contract with a $1 minimum commission charge. All trades plus any applicable market center fees (depends on security being traded).
  2. Active Trader Commissions - To qualify for active trader commission rates, the client must contact Lightspeed first. Per Contract rate (Monthly Volume): $0.50 (Over 500 contracts), $0.45 (Over 2,000 contracts), $0.35 (Over 10,000 contracts), $0.25 (Over 50,000 contracts), $0.20 (Over 100,000 contracts).

All excercise and assignments cost $25.

Mutual Funds - Mutual funds are not currently offered by Lightspeed.

Other Investments - Lightspeed also offers futures trading.

Retirement Accounts - Lightspeed offers retirement accounts but charges a $35 annual fee.

Trade Commissions Breakdown

$4.50 Stock Trade Fee (flat)*
$0.0060 Stock Trade Fee (per share)*
$0.00 Options Base Fee*
$0.60 Options Per Contract Fee*
$15.00 Options Exercise Fee
$15.00 Options Assignment Fee
N/A Mutual Fund Trade Fee
$25.00 Broker Assisted Trades Fee
$5,000.00 Minimum Deposit

Margin Rates

6.00% Under $24,999.99
6.00% $25,000.00 to 49,999.99
5.00% $50,000.00 to $99,999.99
5.00% $100,000.00 to $249,999.99
4.25% $250,000.00 to $499,999.99
3.75% $500,000.00 to $999,999.99
3.50% Above $1,000,000.00

Miscellaneous Fees

$0.00 Bond Trade Fee
$0.00 Treasury Trade Fee
$0.00 CD Trade Fee
$0.00 IVR Trade Fee
$35.00 IRA Annual Fee
$0.00 IRA Closure FEe
$0.00 Forced Margin Sellout Fee
$30.00 Returned ACH Fee
$30.00 Returned Wire Fee
$50.00 Stock Certificate Processing Fee
$50.00 Stock Certificate Delivery Fee
$5.00 Paper Statement Fee
$2.00 Paper Confirmation Fee
$20.00 Domestic Wire Fee
$50.00 International Wire Fee

Lightspeed Trading Ratings

Overall
Commissions & Fees
Customer Service
Platforms & Tools
Research
Ease of Use
Offering of Investments
Education
Mobile Trading
Banking

Lightspeed Trading Awards

2015

Lightspeed Trading was awarded Best in Class for Commissions & Fees and Active Trading. Read the 2015 Online Broker Review.

2014

Lightspeed Trading was awarded Best in Class for Commissions & Fees and Active Trading. Read the 2014 Online Broker Review.

2013

Lightspeed finished #1 for Active Trading and was rated 4.5 stars for Commissions & Fees. Read the 2013 Broker Review.

2012

Lightspeed was Best in Class for Commissions & Fees and Active Trading. Read the 2012 Broker Review.

Offering of Investments

CDs
Wedbush Clearing Firm
0 Commission Free ETFs
Corporate Bonds
Yes Direct Market Routing - Stocks
DRIPs
5000 # of Easy to Borrow Stocks
Forex Trading
Yes Futures Trading
No Fee IRAs
Yes Mini Options
Municipal Bonds
Mutual Funds
0 Mutual Funds (Load)
0 Mutual Funds (No Load)
0 Mutual Funds (NTF)
0 Mutual Funds (Total)
Yes No Inactivity Fees
No Minimum Deposit
Yes Options Trading
Yes Order Type - After Hours
Yes Order Type - Algo
Yes Order Type - Broker Assisted
Yes OTCBB / Pink Sheets
0 Retail Locations
Yes Stock Trading
Yes US Treasury Bonds
Yes Weekly Options

Customer Service

Yes Phone Support
Yes Email Support
Live Chat (prospect clients)
Live Chat (current clients)
24/7 Support

Platforms & Tools

Yes Desktop Platform
Yes Mac Platform
Yes Web Platform
Lightspeed Trader Active Trading Platform
Auto Investing
Ladder Trading
Yes Level 2 Quotes - Stocks
Yes Option Chains - Basic View
Option Chains - Strategy View
Option Analysis - P&L Charts
Yes Streaming Time & Sales
Streaming TV
Yes Trade Hot Keys
Yes Virtual Trading

Research

Research - ETFs
Research - Mutual Funds
Research - Pink Sheets / OTCBB
Research - Fixed Income
Misc - Global Market Overview
Yes Equity Research - News
Yes Equity Research - Chart
Yes Equity Research - Option Chains
Equity Research - Balance Sheet
Equity Research - Cash Flows
Equity Research - SEC Filings
Equity Research - Insider Analysis
0 Equity Research - Research Reports
ETF Research - Top 10 Holdings
ETF Research - Research Reports
Mutual Fund Research - Research Reports
Mutual Fund Research - Fees Breakdown
Mutual Fund Research - Performance Analysis
Mutual Fund Research - Performance Chart
Mutual Fund Research - Top 10 Holdings
Screener - Stocks
Screener - ETFs
Screener - Mutual Funds
Screener - Options
Screener - Bonds

Education

Yes Has Education - Stocks
Has Education - ETFs
Has Education - Options
Has Education - Mutual Funds
Has Education - Bonds
Has Education - Retirement
Investor Dictionary
Yes Client Webinars
Live Seminars
Retirement Calculator
Community Forums

Mobile Trading

iPhone App
iPad App
Android App
Android Tablet App
Mobile Site
Company Data
Company News
Watch List Syncing
Options Chains Viewable
Market Movers (Top Gainers)
Barcode Lookup
Charting - Multiple Time Frames
Charting - Can Turn Horizontally
Charting - Portfolio Perf vs Indices
Charting - Stock Comparisons
Trading - Stocks
Trading - Simple Options
Withdrawal Balance Available

Banking

Checking Accounts
Savings Accounts
Debit Cards
Credit Cards
Mortgage Loans
Mobile Check Deposit
ATM Fee Reimbursement
No Fee Banking

Active Trading

Internalizes Trades
Receives Payment for Order Flow
Yes Client Liquidity Rebates

Best in Class

Best in Class - Offering of Investments
Yes Best in Class - Commissions & Fees
Best in Class - Platforms & Tools
Best in Class - Research
Best in Class - Customer Service
Best in Class - Ease of Use
Best in Class - Investor Education
Best in Class - Mobile Trading
Yes Best in Class - Active Trading
Best in Class - Options Trading
Best in Class - New Investors

Compare Lightspeed Trading:



All pricing data was obtained from a published web site as of 11/01/2014 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the top of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

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