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Lightspeed Review

About Lightspeed Financial LLC

Lightspeed Financial LLC operates through two wholly owned subsidiaries Lightspeed Trading, LLC and Lightspeed Technologies LLC. It has its headquarters in Newyork city, USA.

Lightspeed Trading, LLC is provider of low cost risk management and brokerage services to professional traders, proprietary trading groups and hedge funds through direct market access technology. It provides both electronic and automated trading. It also offers risk management solutions.

Lightspeed’s Offerings

As the name suggests, Lightspeed offers products and services that enables a trader to trade with minimal latency enabling faster execution.

  • Automated Trading
  • Co-location by using NASDAQ’s data center for its server
  • Net-order imbalance indicator – used to identify stocks that have non-normal buy-sell ratios, suggesting strong price movement in one direction or another
  •  Block-trader screener – used to identify stocks for which buy or sell orders greater than a threshold number, say 200,000 shares, have been placed indicating price swing
  • Offers two version of trading platform: web and system-based
  • Offers large number of investment products to choose from: stocks, options, futures, mutual funds, bonds, ETFs, Forex

Advantages

  • Very low latency resulting from co-location and state-of-the-art IT infrastructure makes it preferred choice for algorithm-based trading
  • One of the lowest commissions in the industry
  • Online community facilitates collaboration among traders
  • Free practice account ensures minimum learning cost
  • Web-based trading platform enables trading from system with even basic configuration
  • Innovative and highly useful features like net-order imbalance indicator and block-trader screener provides additional opportunity for profitable trades
  • Customizable trading platform
  • Risk management tools offers many features with most prominent being it helps to measure impact of actual or hypothetical trades on portfolio
  • Won many awards and top-notch rating like Barron’s Highest Ranking for Frequent Traders and Lowest Cost broker d for frequent traders
  • Split-second trading through hot keystrokes or mouse clicks

Disadvantages

  • Web based trading platform become unresponsive  or slow-to-respond in high volume market
  • Web based trading platform is not as stable and bug-free as system-based trading platform is.
  • Customer service leaves a lot to be desired
  • System-installed trading platform slows down or hangs occasionally or in very active trading
  • Difficult to learn for beginners
  • System-based trading platform is resource intensive and thus requires a computer with high-end configuration
  • Mutual Fund trading is not allowed
  • High liquidity fees

Trading Platform

Four Trading platforms are available for Lightspeed’s customers, they being, Lightspeed Trader, Lightspeed Gateway, Lightspeed Forex and Lightspeed web Trader. The Lightspeed trader can used to trade stocks, futures and options online, it comes with a dashboard containing various windows which can be viewed at the same time and customized as well. There is a research and statistics window which provides continuous real-time information about a stock tick on various exchanges. Common windows like Order entry, Margin positions, and Account summary are provided. Apart from these a level II quote window, containing bids and offer prices for a stock from various market participants is useful for day trading.  Another window called ticket alert shows a few stocks which are trading at either intraday highs or lows. The chart window provides the technical analysis chart for a selected stock.

Lightspeed provides flexibility in the methods of order execution using four different methods including both keyboard and mouse click methods. In the keyboard method of order execution various shortcuts are allowed mainly for intraday traders. Live data feed in the form of excel is also available and racks of lightspeed are placed at a NASDAQ data center for the same. Lightspeed gateway enables automated trading with the help of a tool called Black Box Developers Kit (BDK).

Coming to the Forex trader, it is also present in the form of a dashboard with various windows. Mouse click trading is enabled. One good feature is the associate order property that is a kind of if else order containing two orders, the second order being based on the first one.

The Lightspeed web trader enables browser based trading useful for clients who do not have a fixed workstation.

Tools and Education

Lightspeed has a plethora of Risk Management tools in its kitty like Lightspeed Risk, Lighspeed Auto Risk, BOEI and Online Risk Management, all of them aimed at minimizing losses.  The Broker Order Entry Interface (BOEI) enables a manager to directly access his clients account and place orders in case a client is unable to do so.

Commissions and Fees

Lightspeed provides trading platforms in two forms: web based and system based, with different minimum deposit. Lightspeed Web trading platform requires a minimum deposit of $1,000, whereas Lightspeed Trader platform requires a $10,000 as minimum deposit for a web trader and $10000 for a professional trader using Lightspeed trading platform. Furthermore, it charges margin of 6.00%.

Lightspeed offers two pricing choices: per -share and per –trade. The equity per share basis costs $.045 per share or $4.50 per trade. Options and futures can be traded at $.60 per contract. Phone based order facility is also available and is priced at $20 per trade plus regular commission charges.

The Bottom Line

Lightspeed has been primarily geared towards active traders and thus offers services, inter alia, automated trading, direct access, split-second trading suitable mostly for them.

However, its high liquidity fees can be a cause of concern for an active trader as failure to meet their liquidity requirement may significantly lead to decrease in the trading profit. Furthermore, to get best out of Lightspeed requires a system laced with latest configuration. And its below-par customer service can be cause of concern if a person is not well verse with trading platform or know how to deal with unfriendly customer support.

In a nutshell, Lightspeed is great if you are an active trader looking for automated trading with direct access and trades in multiple products, and not much concerned with intermittent software hangs and abrasive customer support. As a final word, Lightspeed is clearly a discount broker targeting quantity rather than the quality of trade.

 

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