Lightspeed Trading Review – Software Option For Day Traders

Established in 1994, Lightspeed Trading has been building tools for day traders in the United States for more than two decades. Although software fees can be rather steep, the broker may deliver enough resources to satisfy the most demanding active traders. We’ve done the homework in this Lightspeed Trading Review.

Pricing

Commissions

There are two pricing schedules at Lightspeed Trading: one is based on the number of shares traded, while the other charges a flat fee per trade. Under the per-share schedule, the commission for stock and ETF trades starts at 0.45¢ per share with a $1 minimum and decreases to 0.1¢.

Under the per-trade system, the flat fee is based on the number of trades an account places per month. For less than 250 trades, Lightspeed charges $4.50, and this rate decreases to $2.50.

Options

Derivatives cost between 60¢ and 20¢ per contract, depending on the number of monthly trades.

Account Fees and Requirements

Lightspeed Trading attracts a lot of day traders, and as a result, the broker requires a $25,000 deposit from clients that plan to use its desktop platform. Investors who plan to trade using the broker’s website are able to open an account with just $10,000.

Lightspeed charges $25 per month for any account that has less than $15,000 in it. The broker does reduce this charge by any commissions that are incurred during the preceding month. Many traders and investors are not accustomed to fees like these as the big discount brokers like TD Ameritrade and Fidelity do not charge such fees.

Software Fees

Lightspeed offers several platforms, and most of them have fees. The most expensive is RealTick Pro, which is $325 per month. As in the case with monthly fees for having less than $15,000, most traders and investors are used to getting massive software packages for free from brokers like TD Ameritrade and their Thinkorswim platform.

LightSpeed Trading Platforms

Lightspeed Trading

The broker’s main desktop platform is divided into equities and options trading. It is possible to toggle between these two functionalities by clicking on either button at the top of the platform. The very top of the platform remains the same in both stock and option modes. This section shows market indices and stock prices.

Equities trading offers a watchlist, an order ticket, a small chart, and Level I data. What I especially liked about this section of the platform was the inclusion of hot buttons. Clicking on a green market buy button sends an order for 100 shares of whatever ticker symbol is currently entered on the platform. A red sell button does the same.  

The option side displays calls and puts with 10 strategies available. This is fewer than E*Trade offers, which is 14. Nevertheless, I found Lightspeed’s option platform to be easy enough to use. I especially liked the Level II option data that was displayed in a separate window.

The windows that make up the equities and options platforms are automatically sized, but can be adjusted for a personal taste.  

I felt that charting on the platform had some serious deficiencies. It was difficult to set the time frame (you have to go into settings). There are only 19 technical indicators and a few drawing tools. TD Ameritrade’s desktop platform has 400 technical studies, by comparison. That’s my opinion in the Lightspeed Trading Review.

Other Platforms

Besides Lightspeed Trader, other platforms can be used with a Lightspeed account. These third-party programs include RealTick Pro, Sterling, and Livevol X. RealTick Pro is geared towards futures traders, and in fact is the only platform at Lightspeed that can trade them. Livevol X is free and is designed with option traders in mind. It offers a derivative scanner and historical options data.

Website and Mobile Trading

Lightspeed offers a mobile app and website that can be used for buying and selling securities. These platforms are not designed for day trading or other sophisticated investing activity. The primary advantage in using these resources is that they are free. The website has Level I quotes, customizable charts, watchlists, and after-hours trading. Disappointingly, per-share pricing cannot be used with the website.

The mobile app is quite archaic when compared to modern apps like Fidelity‘s.

Customer Service

A Lightspeed associate can be reached over the phone during the week from 7:00 am until 8:00 pm, EST as found in the Lightspeed Trading Review. The broker-dealer does not offer any weekend hours, nor does it have an on-line chat feature. The company can be contacted through e-mail, and it offers service in Spanish and Chinese. There is a Lightspeed phone number for clients who are outside the U.S.

Lightspeed seems rather deficient in this category. Several brokerage firms offer 24/7 service. These companies include Ally Invest and Fidelity. And Interactive Brokers offers service on Sundays.

Executions and Routes

Lightspeed Trading offers direct-order routing for an additional charge. SMRT is the default routing system. This choice will allow the broker to choose the best venue. There is no charge for this default option. Other routes do have fees, and these are in the fraction of a penny per share. There are over 100 total destinations.

Shorting Stocks

Lightspeed permits short positions on stocks, and the broker recently added a short locate feature to its desktop platform. Traders simply need to enter a ticker symbol, and the program will return data on the cost to borrow the security per share.

Type of Trader Lightspeed Trading Is Best For

Frequent traders who place a large number of trades every month will benefit from the broker’s commission schedule, which intentionally benefits high-volume accounts. Because Lightspeed doesn’t offer any mutual funds, obviously investors who want to trade them will be disappointed here.

Pros…

• A large variety of trading platforms to choose from.
• Lightspeed offers trading in futures contracts, and commissions range from 25¢ to 60¢, a great deal.
• The broker offers a resource section that hosts videos and articles on several important investment topics, such as how to trade using the dark pool and what a long iron butterfly is.
• In addition to its trading platforms, Lightspeed offers risk management software that is able to keep track of hundreds of thousands of positions.

…and Cons

• Pricey software fees.
• No forex or mutual funds available.
• All account types have large minimum deposit requirements. Accounts that plan to use Lightspeed Trader must deposit $25,000.

Final Judgments

Lightspeed Trading would be a good choice for high-volume traders who will generate enough commissions to offset the cost of the broker’s software.