Lightspeed Review 2018

By Claire Boyte-White  | January 22, 2018

Online brokerage catering to active traders with a wide range of specialized platforms and competitive commission discounts for high-volume trading.

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Overall Rating

2.8/
5.0
Products & Fees
2.4
Trust
3.3
Special Features
4.2
Desktop Experience
4.0
Mobile Experience
3.8
Customer Support
2.5
Research & Insights
3.6
Education
1.8

Lightspeed Fast Facts

Based in New York, this online brokerage was created in 1994 specifically to cater to active traders. With cutting-edge platforms, features, and tools for advanced traders, Lightspeed regularly ranks among the most popular brokerages for day trading.

Lightspeed scores a 2.8 out of 5 from Investopedia. Its trading platforms specialize in certain types of investing, and its routing options, strategic resources, and up-to-the-second data streaming make it an ideal interface for highly active traders. However, Lightspeed doesn't offer access to mutual funds, and portfolio management is available only to institutional investors, so it's not built for passive traders or those looking for professional assistance. While its commissions are still some of the lowest around, regardless of trade volume, Lightspeed's account minimums of $10,000 or more mean this platform is not suitable for casual or low-budget investors.

pros

  • Competitive Standard Commissions
    Stock and ETF commissions start at $4.50, with progressive discounts based on monthly trade volume
  • Special Day Trader Prices
    Per-share pricing starting at $0.0045 per share is available to any paid-platform user - the more shares you have the cheaper it becomes
  • Customization
    From charting layouts to watchlists, options chains to order entry, Lightspeed allows users to customize almost any aspect of the platform
  • Routing Options
    Even the basic platform offers more than 100 order routing destinations, while advanced platforms allow for ultimate customization
  • Complex Options Strategies
    Platform allows for advanced options trading, including debit/credit spreads, straddles, and butterflies, as well as hedged options strategies
  • Education
    Wide range of educational resources, including glossary of terms and strategy how-to guides, videos and webinars, and more in-depth resources for advanced traders
  • Specialized Platforms
    Five platforms catering to different experience levels and focuses, including a platform dedicated to futures trading
  • Free Platforms
    A free web-based platform for equities traders and the free Livevol X platform for options traders

cons

  • Account Fees
    Basic WebTrader accounts under $15,000 are charged a $25 minimum monthly commission fee, less any actual trade commissions charged
  • Software Fees
    There is a monthly fee of $100 to access the advanced Lightspeed Trader platform
  • Account Minimums
    Minimum investment of $10,000 for free WebTrader platform accounts, $25,000 for Lightspeed Trader accounts
  • Limited Passive Investment Options
    Lightspeed does not have a platform to support mutual funds or fixed-income securities
  • Search Function
    The search function does not retrieve particularly relevant results. It will include and highlight all terms in menus and other landing page features for complex search terms
1994
Founded
150 Million
Equity Shares
Traded Per Day
100+
Routing Options

Products & Fees

2.4

Lightspeed's focus on active traders means its commissions and fees must be competitive. While basic WebTrader accounts are subject to a $25 monthly minimum commission, Lightspeed platforms are aimed at traders who will easily surpass that threshold. Basic commissions are some of the lowest in the industry, but very active traders can capitalize on even bigger discounts for stocks, options, ETFs, and futures contracts. To qualify for per-share commissions, users must qualify as Active Traders by placing at least 250 trades per month. However, per-share equities pricing is only available on paid platforms, not on the free web or mobile platforms. Lightspeed's margin rates are similarly competitive, with a minimum equity balance of just $2,000.

  • Stocks/ETFs
    $4.50/Trade*
  • Stocks/ETFs
    $0.0045/Share ($1 minimum)
  • Options (LS Trader)
    $0.60/Contract ($1 minimum)
  • Options (Web Trader)
    $0.60/Contract ($4.50 minimum)
  • Futures
    $0.60/Contract***
  • Penny Stocks
    Via Trade Desk
  • Mutual Funds
    Not Available
  • Bonds & Fixed-Income
    Not Available
  • Forex
    Not Available

Trust

3.3

A member of both FINRA and SIPC, Lightspeed also carries additional insurance to protect user accounts. Since all investing is inherently risky, Lightspeed also makes sure investors are aware of the risk of uncovered derivatives trading, margin trading, and day trading.

$25 Million
Excess SIPC Bond Coverage
Lloyds of London policy for up to 25 Million cash and securities insurance per customer
$25.5 Million
Additional Coverage
Carried by Wedbush on behalf of Lightspeed at no charge

What you need to know

Lightspeed takes online security seriously. The site uses strong encryption technology and offers two-factor authentication on user accounts. However, Lightspeed does share some of your personal information with service providers or companies with which it has mutual marketing agreements. It does not sell user information to third-party marketing companies with which it doesn't have agreements, but users should pay attention to the various opt-out options to ensure that their information is shared with as few entities as possible.

Special Features

4.2
special features

This is where Lightspeed really shines. Depending on which platform you use, Lightspeed provides suites of special features tailored to any trading strategy or technical research need. In-platform tools, studies, screeners, and testing capabilities make Lightspeed an active trader's dream. Coupled with a wide range of web-based resources, Lightspeed is an ideal broker for aspiring day traders and professional investors alike.

Backtesting
Test Trading Strategies
(Through its partnership with Trade Ideas)
10+
Specialized Trading Software and Trading Platforms
100+
Customizable Routing Destinations
Route orders through market centers, ECNs, and dark pools

What you need to know

Traders looking for all the bells and whistles should look no further. Lightspeed has consistently improved and expanded its suite of advanced tools and features, highlighting its focus on professional-grade and institutional investors. Lightspeed's partnership with Trade Ideas offers users an even wider array of fully customizable and automated trading and strategy testing options, and it consistently receives accolades and awards from industry insiders. However, Lightspeed does not offer advisory services (human or robo), so it isn't ideal for anyone looking for professional assistance.

Desktop Experience

4.0
desktop experience

Lightspeed's basic web-based platform is easily customizable and offers plenty of tools and research resources for active traders who want a solid, free platform. The $100-a-month advanced Lightspeed Trader desktop platform, however, is built for the trader who needs one-screen access to multiple data sources. Each quote, profile, news stream, or trading screen is its own window, which can be arranged to suit the trader's needs. You can keep a few crucial quotes open at the top of your screen as you go about other business, or fill your monitor with data. While the flexibility of these platforms is fantastic for day traders and professionals, it may be unnecessarily robust for the buy-and-hold crowd.

Pros

Lightspeed offers fully customizable charts, even for the basic WebTrader platform. Your customized settings and layouts are stored on Lightspeed's server, so you can access saved settings from any device.. In addition to offering a wide range of technical studies, the WebTrader platform allows users to overlay drawn trend lines and free-form diagrams, as well as Fibonacci circles, error channels, and Raff regressions.

For non-professionals, Lightspeed streams real-time market data across all platforms. For professional investors using the free WebTrader platform, real-time data and research comes at a $105-per-month premium, but it is included with all advanced platforms.

The advanced Lightspeed Trader platform offers a huge array of tools and resources and is relatively easy to use after an initial learning curve. Tickers can be added to watchlists based on currently open quotes, and analyst ratings, news, and other research tools automatically update when you pull up a quote for a new ticker symbol. For options traders, advanced options data, chains, and analysis are available on the free Livevol X platform. For futures traders, there are multiple options, including the free CME Direct platform.

Cons

Unsurprisingly, the primary downsides of Lightspeed's desktop experience revolve around the difference between the free and paid platforms. For example, all paid platforms allow for conditional orders, but the free platform does not.

For new or casual investors, or those who are not interested in day trading, the primary drawback of the Lightspeed platforms is that they may be overwhelming. The advanced platform, especially, is very data-heavy, with real-time streaming updates in multiple windows and numerous ways to customize and adjust each screen. An investor looking to simply research and trade a handful of securities a year would be better served by a leaner platform.

Mobile Experience

3.8
mobile experience

Lightspeed offers both a mobile website and downloadable apps for iOS and Android. While these mobile options aren't quite as robust as the web-based or downloadable desktop platforms, they are still serviceable for checking stock prices, news, and watchlist alerts on the go.

Pros

Both the mobile site and the app allow users to create and update watchlists and alert settings, read relevant news, and place equity and options trades from anywhere. You can view activity charts within the quote screen and switch quickly from news and stock info to options chains with a single tap. While the apps have slightly limited capabilities, the mobile site is the same as the standard web-based platform, meaning you can access screeners and see your dynamically updated order info on the go.

Cons

The primary downside of Lightspeed's mobile offerings is their lack of analytical tools. Charting capabilities are minimal, and you can't overlay studies or draw trend lines. The absence of screening tools, analyst research, and other advanced resources makes the apps better suited for investment monitoring than execution.

Customer Support

2.5

Since Lightspeed is an online brokerage focused on active traders, it puts a heavy emphasis on speedy support. While phone lines are staffed only during market hours, traders who call in for help then will be in touch with a professional in 30 seconds or less. For day traders, that quick response time can make a world of difference. While phone support is fast and efficient, Lightspeed doesn't offer online chat or 24-hour assistance. Once again, Lightspeed's focus is on active traders who already know what they're doing, not on new investors or those who like to have someone walk them through new features.

The exception to this rule is for traders using one of the futures trading platforms. They do have access to 24-hour support.

What you need to know

For day traders, immediate phone assistance is available during market hours. Both email and an internal messaging system are available for less time-sensitive queries. Lightspeed also has both Facebook and Twitter accounts, which are regularly monitored. While it isn't the primary method of support, questions sent in on social media are attended to in a timely manner.

Research & Insights

3.6

Like its special features, Lightspeed's selection of active trading-focused research tools, analyst ratings, and technical data make this broker ideal for analysis junkies. The site's Resources section provides product tutorials, general news, educational resources, and a blog, "Active Trading". However, neither the site, the free WebTrader platform, nor the advanced Lightspeed Trader platform offers any fundamental analysis resources.

Analyst Ratings
Robust selection of analyst ratings and reports, as well as accountability metrics, through partnership with TipRanks
Peer-to-Peer Forum
In partnership with Hammerstone Markets, view current news, trade ideas, and compare strategies with other traders
"Active Trader" Blog
Insight on strategy, analysis, alternative investments (such as cryptocurrencies), and margin trading
Weekly Index Updates
News and Blog sections provide weekly updates of IPOX index performance
Watchlists and Alerts
Easily customizable watchlists and alerts allow you to keep track of numerous securities at once
Stock Screener
Advanced platforms include customizable stock screeners to help you identify opportunities

Pros

Lightspeed is all about technical analysis. The charting capabilities of its platforms ensure that traders can find, view, overlay, and analyze any performance metric their hearts desire. The stock screeners and in-depth analyst reports help users pinpoint opportunities, while the customizable watchlists and alerts keep them abreast of crucial developments. The "Active Trading" blog is full of contributor content aimed at helping users learn and execute short-term trade strategies and make the most of everything the platforms have to offer.

The Livevol X options trading platform provides more advanced options data and analysis, and all users have access to the TipRanks suite of resources.

Cons

Unfortunately, Lightspeed's laser-like focus on active trading means it has no room in its feature suite for fundamental analysis. There is no way to check company financials, review ratios, track earnings, or otherwise take stock of how a given company is doing. This makes sense, of course, because Lightspeed is built for people who trade minute to minute, not year to year, so long-term corporate trends and future innovations are less important than being able to chart multiple studies or keep a handful of quotes on-screen at once. However, investors who want to incorporate fundamentals into their trading strategy will be best served elsewhere.

In addition, Lightspeed's website is light on any actual news, instead focusing on brokerage mentions in industry publications. The free web-based platform does offer real-time news as part of the streaming data package (free for non-professional users), and the paid downloadable platforms include streaming data and news in the monthly fee. Unfortunately, you cannot sort news by market or index, making it harder to locate market or sector-specific updates.

Education

1.8

Though Lightspeed's focus is on traders who are already fairly advanced, the site still provides a surprisingly rich array of educational resources. The Education section has numerous videos, articles, and webinars aimed at teaching new traders the basics of different securities, explaining important tax considerations, and outlining trading strategies. The site also provides a number of online classes and FAQs to help new and still-learning investors find what they need to progress.

Glossary
Focused Active Trading Strategies and Technical Analysis
Product Tutorials
Short videos walk users through different platforms and subsequent software updates
Videos
Brush up on topics from tax issues to day trading tips and tricks

What you need to know

While Lightspeed may not be the ideal platform for new or casual traders, its website provides a decent selection of useful educational resources. Even if you aren't looking to become an active trader, the Education section is a good place to look for information, especially if you're interested in learning about more advanced options trading. Lightspeed provides truly in-depth overviews of more than 40 strategies, including maximum gains and losses, the role of time decay, and the impact of market volatility.

Banking

Lightspeed is not a brokerage looking to dominate the entirety of the investment industry; it is focused on providing cutting-edge investment platforms for very active traders. It doesn't deviate from its core offering by providing banking services.

Bottom Line

Lightspeed was built to fill a niche in the investment industry, and it hasn't shifted focus since its founding in 1994. This platform won't be suitable for new investors, those looking for managed portfolio or advisory services, or even DIY investors planning to execute only a handful of trades a year. But for day traders, data junkies, or even professional investment managers, Lightspeed's advanced platforms offer cutting-edge features, research tools, and charting capabilities. The mobile offerings aren't built for meaningful trading activity, but the desktop platforms allow for a degree of analysis, customization, and automation that would be difficult to top.

Claire Boyte-White
Reviewed by Claire Boyte-White

  • • Investopedia Contributor since 2014
  • • Lead Writer for NapkinFinance.com
  • • Co-Author of I Am Net Worthy, a Millennial-focused book on financial independence

Experience

Claire has been writing about personal and corporate finance, retirement planning, investing, and tax policy since 2013.

Claire believes that financial literacy resources and investing education should be readily available to everyone, so she enjoys making complex topics accessible and engaging. Her keen attention to detail and head for numbers have made her a perfect fit for Investopedia.

Education

Claire received her Bachelors from Willamette University with a degree in Psychology.

Quote from Claire

"I know many people find investing and financial topics overwhelming. As our cultural and economic landscape continues to change rapidly, it's more important than ever for everyone - from new college grads to retirees - to feel comfortable and competent when it comes to financial planning. I consider my role in the industry to be that of a facilitator: breaking down intimidating concepts and making financial literacy accessible to all."

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