Lightspeed Review

By Claire Boyte-White  | October 25, 2017

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

Overall Rating

2.6/
5.0
Products & Fees
2.4
Trust
3.3
Special Features
4.2
Desktop Experience
4.0
Mobile Experience
3.3
Customer Support
1.3
Research & Insights
3.1
Education
2.3

Lightspeed Fast Facts

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

Lightspeed scores a 2.6 out of 5 from Investopedia. Its range of trading platforms are designed to specialize in particular 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, there is no access to mutual funds, and portfolio management is only available to institutional investors, so passive traders or those who want professional assistance will need to look elsewhere. While its commissions are still some of the lowest around, regardless of trade volume, Lightspeed’s account minimums of $10,000 or more make this brokerage unsuitable for casual or low-budget investors.

pros

  • Competitive Standard Commissions
    Stock and ETF commissions start at $4.50, with progressive discounts for monthly trade volume
  • Special Day Trader Prices
    Per-share pricing starting at $0.0045 per share is available for day traders or those who trade in bulk
  • Customization
    From charting layouts and watchlists to options chains and order entry, almost any aspect of the platform is customizable
  • Routing Options
    Even the basic platform has more than 100 order routing destinations, while advanced platforms allow for ultimate customization
  • Complex Options Strategies
    Users can engage in advanced options trading, including debit/credit spreads, straddles, and butterflies, as well as hedged options strategies
  • Specialized Platforms
    Five platforms catering to different experience levels and focuses, including one dedicated to futures trading

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 $100 per month fee 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
    Platform does not support mutual funds or fixed-income securities
  • Search Function
    Search function does not retrieve particularly relevant results

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*
  • Options
    $4.50/trade + $0.60/contract**
  • Futures
    Base Pay + $0.60/contract***
  • Penny Stocks
    Via Trade Desk
  • Mutual Funds
    Not Available
  • Bonds & Fixed-Income
    Not Available
  • Forex
    Not Available

Trust

3.3

In addition to being a member of both the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (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.

What you need to know

Lightspeed also takes online security very seriously. The site uses strong encryption technology and 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 they do not have agreements, but users should pay attention to the various opt-out options to ensure 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, the brokerage provides suites of special features tailored to any trading strategy or technical research need. In-platform tools, studies, screeners, and testing capabilities make it 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.

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 gives 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, the brokerage does not offer advisory services (either human or robo) so it isn’t ideal for those 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 need a solid, free platform. The advanced Lightspeed Trader desktop platform, however, is truly 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 any trader’s demands. 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 has fully customizable charts, even on 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 providing a wide range of technical studies, the WebTrader platform lets users overlay drawn trend lines and free-form diagrams, as well as Fibonacci circles, error channels, and Raff regressions.

For non-professional users, Lightspeed provides streaming real-time market data across all platforms. For professional investors, real-time data and research is included on all advanced platforms (but comes at a $105-a-month premium on the free WebTrader platform).

The advanced Lightspeed Trader platform includes a huge array of tools and resources and is relatively user friendly 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.

Cons

Unsurprisingly, the downsides of Lightspeed’s desktop experience mostly revolve around the differences between the free and paid platforms. All paid platforms allow for conditional orders, for example, but the free platform does not. Similarly, options screeners and advanced options analysis are only available on the Livevol X platform, though options trading is available across all platforms.

For new or casual investors, or those who are not interested in day trading, the primary drawback of the platforms is that they may be overwhelming. The advanced Lightspeed Trader platform, in particular, 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

3.3
mobile experience

Lightspeed has both a mobile website and a downloadable app for both iOs and Android. While these mobile options don’t provide the same capabilities as the web-based or downloadable desktop platforms, they are still serviceable options 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 from news and stock info to options chains with a single tap.

Cons

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

Customer Support

1.3

Given that Lightspeed is an online brokerage focused on active traders, 24-hour assistance would be a handy feature. However, while Lightspeed does offer email and phone support, it’s not round-the-clock. Once again, the broker’s focus is on active traders, who already know what they’re doing, not new investors or those who like to have someone walk them through new features.

What you need to know

Lightspeed does not offer an online chat option, which would likely be the most useful method of communication for active traders who need to keep their eyes on the screen. However, both email and an internal messaging system are available for less time-sensitive queries, which may cut down on phone line wait times during business hours.

Research & Insights

3.1

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 links to product tutorials, general news, educational resources, and an Active Trader blog.

Analyst Ratings
Robust selection of analyst ratings and reports through partnership with TipRanks
Peer-to-Peer Forum
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 all its platforms ensure that traders can find, view, overlay, and analyze any performance metric their heart desires. The stock screeners and in-depth analyst reports help users pinpoint opportunities, while the customizable watchlists and alerts keep users up to date on crucial developments. The Active Trader blog is full of contributor content aimed at helping users learn and execute short-term trade strategies and make the most of all that the platforms have to offer.

Cons

Unfortunately, Lightspeed’s laser focus on active trading means it has little room in its feature suite for fundamental analysis. 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 or future innovation are less important to users 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 web-based news offerings are light on any actual news and instead focus on brokerage mentions in industry publications. What’s more, you cannot sort news by market or index, making it harder to locate market or sector-specific updates.

Education

2.3

Though Lightspeed’s focus is on traders who are already fairly advanced, the site still provides a surprisingly robust array of educational resources. The Education section of the website (under Resources) 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.

What you need to know

While Lightspeed may not be the ideal platform for new or casual traders, the website provides a decent selection of educational resources that could be very useful – even if you aren’t looking to become an active trader. Especially if you’re interested in learning about more advanced options trading, Lightspeed provides truly in-depth overviews of more than 40 options trading strategies, including maximum gains and losses, the role of time decay, and the impact of market volatility.

Banking

Lightspeed is not looking to dominate the entirety of the investment industry. Focused entirely on providing cutting-edge investment platforms for very active traders, the brokerage 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 only looking to execute a handful of trades per year. However, for day traders, data junkies, or even professional investment managers, Lightspeed’s collection of advanced platforms are replete with 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

Claire has been writing about retirement planning, tax policy, investing and corporate finance for over a year. After leaving her career in the insurance industry working for high-profile clients, Claire decided to pursue a career in writing. Her keen attention to detail and head for numbers has made her a perfect fit for Investopedia.

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