Lightspeed is an online broker that caters to a specific group of traders – the active and hyperactive traders. The broker offers deep discounts if your monthly trading volume meets certain requirements, with fees going as low as $0.0010 per share for a monthly trading volume of over 15,000,000 shares.
Beside very competitive fees, Lightspeed also offers all the necessary tools to succeed in a fast-paced trading environment. In this review, we’ll cover all important points you need to know before choosing Lightspeed as your broker.
- Discounted fees for active traders
- Powerful trading tools and platforms
- Award-winning customer service
- 2017 FinTech Breakthrough Award “Best Online Broker”
- 1. ETF Trading Offer: With Lightspeed, Active Trader Feel at Home
- 2. Exchanges and Trading Centres – Traders Can Choose Among Many Data Feeds
- 3. Trading Conditions: Deeply Discounted Commissions for Hyperactive Traders
- 4. Trading Platform: Lightspeed Offers a Variety of Trading Platforms
- 5. Usability of the Website – Useful Website with Loads of Information
- 6. Customer Support – 24/7 US and International Telephone Line
- 7. Methods of Payment – Lightspeed Accepts Wires, ACH Transfers and Checks
- 8. Additional Offers: Educational Resources and Demo Accounts
- 9. Regulation & Deposit Protection – Member of FINRA and SIPC + Excess SIPC Coverage
- 10. Awards – FinTech Breakthrough Award “Best Online Broker” in 2017
- 11. Conclusion: If You’re a High-Volume Trader, Choose Lightspeed
Trader Rating Total
New York, USA (FINRA)
Yes, Demo testing of trading platforms
1.) ETF Trading Offer: With Lightspeed, Active Trader Feel at Home
Lightspeed is an interesting discount broker as it caters mainly to one type of investor – the active trader. All of the broker’s tools, trading platforms and the fee structure are built for traders who trade multiple times per day. However, traders who want to trade on the broker’s advanced Lightspeed trader or third-party platforms have higher initial deposit requirements.
Lightspeed offers trading on US-based and the over the counter markets. Day-traders may benefit from highly-liquid markets which reduce slippage and increase the execution speed.
Depending on whether you’re a professional or non-professional trader, the following accounts are offered by Lightspeed: Reg-T margin account, portfolio margin, separately managed accounts (SMAs), DVP/RVP accounts, CMTA agreements.
Reg-T accounts allow you to borrow up to 50% of the purchase price of securities, which is also known as the initial margin. Portfolio margin accounts are even more interesting for active and day traders, as they allow qualified customers to increase their leverage beyond the 4:1 intraday and 2:1 overnight margin of a standard margin account.
In addition, traders can also open accounts such as individual/joint accounts, partnerships, corporate accounts, LLC and IRAs.
- Various account types for all investment needs
- Highly-liquid US-based markets for active traders
- Individual, corporate and IRA accounts
2.) Exchanges and Trading Centres – Traders Can Choose Among Many Data Feeds
Lightspeed offers trading on equities and options that are listed on major US-based exchanges. Real-time Level 1 quotes are available for all US equity markets, Dow Jones indices and pit-traded S&P 500 indices, as well as for certain individual market data feeds.
The broker also offers individual market data feeds that include the ARCA book, BATS (BZX) book, EDGX book, EDGA book, NYSE open book, NASDAQ Level 2 book, NYSE Level 1, Dow Jones Index data, AMEX Level 1 and data on Option Greeks.
Traders need to subscribe to the mentioned market data, with rates depending on their status. Professional traders usually have to pay higher rates for the data bundles than non-professional traders.
Nevertheless, you can subscribe only to the data bundles that you need in your trading, which is a cost-saving feature for traders who don’t trade on all exchanges. Individual market data feeds can’t be combined with the real-time Level 1 bundle on all US equity markets.
It’s a welcoming option that customers of Lightspeed who use multiple terminals and who subscribe to the NYSE data feed may be eligible for reduced rates on a per terminal basis.
- Major US-based exchanges supported
- Fees depend on trader’s status
- Clients can subscribe to data feeds they need
3.) Trading Conditions: Deeply Discounted Commissions for Hyperactive Traders
The broker’s focus on active day-traders can be seen by the structure of fees and commissions.
Fees on stock and ETF trades start at $0.0010 per share for the hyperactive traders who trade over 15,000,000 shares per month. This rate increases to $0.0015 for traders who trade over 6,000,000 shares per month. The fees continue to increase to $0.0020, $0.0025, $0.0035 and $0.0045 for traders who trade over 3,000,000 shares, over 1,000,000 shares, over 250,000 shares and under 249,999 shares, respectively.
Traders who trade under 249,999 shares per month have to pay a minimum of $1 per order, with a per share rate of $0.0045.
Option traders face a similar fee structure as stock and ETF traders, with the following fees: $0.20 per contract for over 100,000 contracts per month, $0.25 per contract for over 50,000 contracts per month, $0.35 per contract for over 10,000 contracts per month, $0.45 per contract for over 2,000 contracts per month, $0.50 per contract for over 500 contracts per month, and $0.60 per contract for under 500 contracts per month.
Fees on futures trades are very similar to options trades, with the only difference in the fees for over 100,000 contracts traded per month ($0.25) and over 50,000 contracts traded per month ($0.30). All other fees remain the same.
- Fees depend on monthly trading volume
- Large discounts for active traders
- Once you reach a certain fee group, all shares traded will be charged that rate
4.) Trading Platform: Lightspeed Offers a Variety of Trading Platforms
Lightspeed offers a number of very powerful trading platforms to trade on. The Lightspeed Trader, Lightspeed Web Trader and Sterling Trader platforms are all corporate owned.
Third-party trading platforms on offer include RealTick Pro and Express for equity traders, and Livevol X, Derivix, Obsidian, OptionsCity, Valdi Options Solutions and Wex for options traders. Futures traders can choose from several other platforms, including RealTick, CQG, CunninghamTrading Systems (CTS), NinjaTrader, Patsystems, Quick Screen Trading (QST), RAN, and Trading Technologies (TT).
As our broker comparison shows, there are not many brokers who can compete with Lightspeed’s offer of trading platforms.
Lightspeed Trader and Sterling Trader charge a monthly fee of $100, which can be waived if at least $100 in commissions is spent during the month. The web-based version of Lightspeed Trader is free of charge.
The broker’s flagship platform, Lightspeed Trader, is an extremely powerful software for active traders. The complete interface is designed with speed and stability in mind.
Traders who look for research and analytical tools in a platform may be disappointed by Lightspeed Trader. It seems that the main focus of the platform is lightning-fast order execution.
A mobile version of Lightspeed Trader is available for both iOS and Android devices.
- Many platforms to choose from for equities, options and futures traders
- Advanced tools for lightning-fast trade execution
- Lightspeed Trader and Sterling Trader are charged $100/month (waived if $100 in commissions is spent during the month)
5.) Usability of the Website – Useful Website with Loads of Information
Lightspeed has a well-designed and easy to use website, with top products clearly advertised on the homepage. Fees and commissions are also showcased directly on the homepage.
The website has five main tabs, located at the top of the site: Brokerage Services, Technology, Pricing, New Clients and Resources.
The Pricing tab covers everything around fees, including Lightspeed routing fees, service and processing fees, margin rates and market data rates.
Prospective clients who want to learn more about the broker can do so by clicking on the “About Us” link at the bottom of the homepage. This link opens a sub-page with the Lightspeed’s management team, including information on the CEO Farid Naib, COO, CSO, CCO and other key people of the Executive Board.
The website also hosts a News section, with news and latest blog posts about Lightspeed’s trading offer. There is also a well-organised FAQ section with dozens of answers, covering everything from the Lightspeed Trader to tax information. Prospective clients could find loads of useful information on the FAQ section before opening an account with the broker.
The website is also available in the Spanish and Chinese language.
- Well-designed website
- Comprehensive FAQ section
- Available in Spanish and Chinese
6.) Customer Support – 24/7 US and International Telephone Line
Lightspeed offers e-mail and telephone support, on-site contact forms and a customer feedback form.
Depending on where you’re based, you can call the broker’s US or international phone number. The telephone support is available 24/7, which is a welcoming feature as the broker doesn’t support live chat support.
In our broker comparison, Lightspeed’s customer support was easy to reach with a usual waiting time of around 1 minute or less, and the service was very helpful and professional.
If you need to contact the broker by post to send physical documents, there are two addresses stated on the site – the New York office and the Chicago office.
The broker also features a customer feedback form, which can be accessed by clicking on the Resources link. The feedback can be marked as a compliment, suggestion or criticism, and you can state the Lightspeed employee with whom you have communicated on the issue. As our ETF broker comparison shows, there are not many brokers offering this feature.
Overall, it seems that the best way to contact to the broker is by telephone, as Lightspeed displays its telephone number also on other sub-pages outside of the contact sub-page.
- Lightspeed offers telephone and e-mail support
- Customer feedback form available
- No live chat option
7.) Methods of Payment – Lightspeed Accepts Wires, ACH Transfers and Checks
Lightspeed accepts wire transfers, checks and electronic ACH transfers to fund your account.
The broker has a rather high initial funding requirement of $10,000, which provides access only to the broker’s Web Trader platform. Traders who want to use Lightspeed Trader, RealTick or Sterling Trader have a minimum deposit requirement of $25,000. Portfolio margin accounts have the highest initial funding requirement of $175,000. These numbers are rather high compared to other online brokers, as our broker comparison shows.
Accounts funded by check or ACH transfers are subject to a hold of 5 business days, while accounts funded by wire are credited 24 hours after the wire transfer.
Clients who want to use electronic ACH transfers for funding or withdrawal purposes need to set up an ACH link directly on the broker’s website. Once the link is confirmed, it takes up to 2 business days for ACH transfers to complete.
The broker doesn’t accept third-party wires or checks and doesn’t charge any fees on incoming transfers.
While there are no fees for ACH withdrawals, wire withdrawals are charged $20 for domestic wires and $50 for international wires, which is in-line with leading competitors.
- Wires, ACH transfers and checks accepted
- High initial deposit requirements, starting from $10,000 for the Web Trader
- Wire withdrawal fees $20 for domestic wires, $50 for international wires
8.) Additional Offers: Educational Resources and Demo Accounts
Lightspeed offers a comprehensive education centre with live webinars, an active trading blog, trading tools and other educational resources.
The broker’s webinars are mostly based on topics covering the Lightspeed’s range of trading platforms, such as setting up hot keys and custom orders on the Lightspeed trader, how to trade options using the Lightspeed trader, and so on. It’s free to subscribe to upcoming webinars, and traders can also watch previously recorded webinars on the website.
The Active Trading Blog provides much more useful information for traders who want to sharpen their trading tools. There are around 2-3 new blog posts each week, covering strategies on options trading, tips on how to recover from a bad trading day, and providing commentary on trending market news.
Trading tools are mostly based on offerings from TipRanks and Hammerstone and include stock analysis tools, analyst price targets and tools to optimize your portfolio performance, to name a few.
The broker’s educational resources are mostly covering option trading strategies, which are very comprehensive with dozens of strategies explained. There’s also a trading glossary from A to Z.
Before opening a real account with Lightspeed, prospective clients can try a demo account to get familiar with the broker’s trading platforms.
- Comprehensive educational resources for option traders
- Regularly updated trading blog
- Demo accounts available
9.) Regulation & Deposit Protection – Member of FINRA and SIPC + Excess SIPC Coverage
Lightspeed is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investors Protection Corporation (SIPC). The SIPC protects customers’ accounts up to $500,000, of which a maximum of $250,000 applies to cash balances. However, Lightspeed also provides an excess SIPC coverage through Wedbush, its parent broker. The excess SIPC protects up to $25.50 million in cash and securities for each client account.
Wedbush has also purchased a policy from Lloyd’s of London, which provides additional coverage of up to $25 million, subject to an aggregate loss of $100 million, with a cash sub-limit of $900,000.
The mentioned policies don’t protect against the decline of market values of securities.
Lightspeed uses the latest authentication technology to add an extra layer of protection to your trading account setting and fund transfers. This is achieved through a 2-step verification process that sends one-time-use pass codes to your mobile device which are needed to enter your trading account. The website also uses a secure https:// internet protocol with up-to-date certificates, which encrypts all data sent between your broker and the website’s server.
As our ETF broker comparison shows, Lightspeed protects more client funds and has a more secure login process than many other online brokers.
- Member of FINRA and SIPC
- Excess SIPC coverage and Lloyd’s insurance policy
- 2-step verification process to log into trading accounts
10.) Awards – FinTech Breakthrough Award “Best Online Broker” in 2017
Lightspeed has received numerous awards over the years. In 2017, the broker won the FinTech Breakthrough Award in the category of “Best Online Broker”, in a fierce competition among other notable winners such as Discover Bank, Square, NerdWallet and Zillow. Overall, there were over 3,000 nominations for the award received across different categories.
The FinTech Breakthrough Award highly-rated Lightspeed’s trading fees – which are among the lowest in the industry – and professional customer service which is available by phone through extended market hours. The broker’s platform, Lightspeed Trader, was also praised for its speed and stability.
Another major reviewer of brokers, StockBrokers.com, awarded 3 out of 5 stars to Lightspeed. Broken down by category, the broker’s commissions and fees received 3 stars, offering of investments 3 stars, platforms and tools 3 stars, research 1 star, customer service received impressive 4 stars, mobile trading 2 stars, ease of use 2.5 stars, education 2.5 stars, order execution 3 stars and in the banking category, Lightspeed received only 0.5 stars. While is not enough to be awarded “Best ETF Broker”, we need to be aware that Lightspeed caters mostly to a specific group of traders – the active traders.
- 2017 FinTech Breakthrough Award “Best Online Broker”
- StockBrokers.com awarded 3 out of 5 stars to Lightspeed
- Commissions and fees, customer service and platforms are highly-rated
Conclusion: If You’re a High-Volume Trader, Choose Lightspeed
Lightspeed is a specific discount broker that caters mostly to hyperactive and active traders. There are deep discounts on fees and commissions for traders who trade more than 250,000 securities per month, with the per share rate dropping to only $0.0010 on a monthly volume of over 15,000,000 shares.
The broker’s platforms and tools follow its main principle of high-volume trading, with powerful and robust third-party platforms on offer providing specific tools for high-speed traders. However, traders have to meet a rather high initial deposit requirement of $25,000 to get access to certain platforms. Even to trade on entry-level Lightspeed Web Trader, the broker asks for a minimum deposit of $10,000.
There are not many online brokers that cater specifically to high-volume traders. If you’re monthly trading volumes qualify for Lightspeed’s Active Trader status, then Lightspeed is probably one of the best ETF brokers for you, providing you with all necessary tools to succeed in a lightning-fast trading environment.
- Discounts for very active traders
- Powerful in-house and third-party platforms
- Trading tools for high-volume trading
- Customer service available through extended market hours
- High initial deposit requirement
- Monthly fees to use some trading platforms (waived if certain conditions are met)