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Lightspeed Trading Review 2019

Jan. 3, 2019
Brokers, Investing
At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Lightspeed Trading aims to fill the needs of a very specific kind of investor: a very active, high-volume trader who wants cheap and fast trades. The ideal client? A professional trader.

That’s not to say amateurs can’t use Lightspeed — but to derive the most value it helps if you make more than 250 stock trades or purchase 500-plus options contracts a month. Those who aren’t quite in that league may be better served by more mainstream brokers like TD Ameritrade’s thinkorswim, Interactive Brokers or TradeStation. All of those offer sophisticated trading tools plus much more education and research for the nonprofessional stock trader.


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quick Facts

  • Commissions: $4.50 fixed rate; volume discounts available
  • Account minimum: $10,000 (Web/Mobile Trader platform); $25,000 (Lightspeed Trader platform)
  • Promotion: 50% rebate of first 3 months of commissions, up to $10,000 (for new Lightspeed Trader customers only)
Get started on Lightspeed Trading's secure site

Lightspeed Trading is best for:

  • Advanced traders.
  • Day traders.
  • Options traders.
  • Futures traders.

Lightspeed Trading at a glance

Overall
3.5 NerdWallet rating
Account minimum

$10,000 for Web Trader platform ($2,000 for IRAs).

All other platforms (Lightspeed Trader, RealTick, Sterling Trader): $25,000 ($10,000 for IRAs.

Margin account: $175,000.
Stock trading costs

Lightspeed Trader: $4.50/trade or $0.0045 per share ($1 minimum).

Volume discount as low as $2.50 per trade or $0.0010 per share.

Lightspeed Web/Mobile: $4.50 per trade.
Options trades

Lightspeed Trader: $0 base + $0.60 per contract ($1 minimum).

Volume discount as low as $0.20 per contract.

Lightspeed Web/Mobile Trader: $0.60 per contract ($4.50 minimum).
Account fees (annual, transfer, closing, inactivity)

$25 minimum monthly commission fee for accounts under $15,000.

IRA opening fee $20; IRA annual fee $35 (first year waived); IRA closing fee $95.

$95 ACAT outbound fee.

$100 minimum monthly commission for Lightspeed Trader users.
Commission-free ETFs

None.
Number of no-transaction-fee mutual funds

None.
Tradable securities

• Stocks.
• ETFs.
• Options.
• Futures.
Trading platform

Lightspeed Trader (desktop) for active traders, hedge funds and institutions. $130 monthly platform fee (reduced by commissions generated).

Lightspeed Web/Mobile Trader for occasional day traders.
$0 platform fee; market/data feeds free for nonprofessional traders.

Futures trading on RealTick and CQG platforms only.
Mobile app

Available for iOS and Android; features basic functionality of the Lightspeed Web/Mobile Trader platform.
Research and data

Real-time streaming data, historical charting, TipRanks analyst reviews/research, Lightscan stock screeners.
Free practice/demo paper trading account.
Customer support options (includes website transparency)

Phone and email general support: 7:30 - 5 p.m. ET.
Trade desk (phone): 24/7.
Promotion

New Lightspeed Trader, Sterling or RealTick accounts: 50% rebate of stock and options commissions for the first three months (up to $10,000).

Where Lightspeed Trading shines

Low commissions: Lightspeed’s standard commission for stocks and ETFs is $4.50 per trade, making it one of the lowest-priced brokers out there. Options transaction fees are similarly cheap: no base charge (minimum $1 per order) and just $0.60 per contract for those trading fewer than 500 contracts a month. That’s even less than Interactive Brokers’ $0.70 per-contract charge.

Lightspeed’s volume discounts are what will really turn heads among heavy traders. The tiered per-trade and per-share commission rates can yield big savings — if you qualify. The price drops to $4 a trade for investors who make between 250 and 750 trades a month and drops to a low $2.50 if you make more than 10,000 trades a month. Per-share discounts start at $0.0045 per share ($1 minimum trade commission) if you trade fewer than 249,999 shares per month and decline from there.

There are also discounts for options traders: Prices range from $0.50 per contract (requires between 500 and 2,000 contracts a month) to as little as $0.20 for high rollers trading more than 100,000 contracts per month.

Futures trading: Lightspeed is one of a handful of brokers NerdWallet rates that offer futures trading. Lightspeed’s going rate is $0.25 to $0.60 per contract based on trading volume.

Trading platforms: Lightspeed has multiple trading platforms, with several that cater almost exclusively to hedge funds and institutions. Two — Lightspeed Web/Mobile Trader and the desktop-based Lightspeed Trader — are best suited for nonprofessional individual investors.

Non-pro stock and options traders pay no monthly market or data fees on Lightspeed Web/Mobile Trader. The platform comes with real-time Level 1 streaming data for stocks and options, historical charts, watch lists, and TipRanks analyst research.

For more active traders, the desktop-based Lightspeed Trader platform allows for expedited order entry and execution. You’ll pay a $130 monthly platform fee for access, but the fee is reduced by any commissions generated.

Lightspeed Trader offers direct-market access. Orders are sent straight to one of 100 routed destinations, skipping the typical pit stop at an intermediary brokerage firm. This speeds up order fulfillment by seconds (even nanoseconds), which matters to day traders. Note that customers using these platforms will pay routing fees (e.g., $0.0013 to $0.0031 for NYSE orders) on top of the trading commission. Also included are real-time streaming Level 2 data (more robust than Level 1), TipRanks and Lightscan stock screening.

For those interested in test-driving the Lightspeed Trader platform, we recommend opening a free demo/paper trading account.

Where Lightspeed Trading falls short

Minimum investment requirement: As we’ve been saying, Lightspeed’s target audience is professionals or, if not a professional, at least a seriously active or high-volume trader. The broker’s minimum investment requirements reflect that. At $10,000, Lightspeed Web/Mobile Trader has the lowest initial and ongoing account minimum requirement among the company’s offerings. (Retirement accounts on this platform require a $2,000 minimum.) Its closest competitor, Interactive Brokers, did away with account minimums in 2018. And it’s also higher than TradeStation’s minimums — $500 for a stock-trading account, $2,000 for options trading and $5,000 for futures trading.

The minimums are higher — $25,000 for a regular brokerage and $10,000 for a retirement account — for the more robust Lightspeed Trader platform, as well as the other services aimed at institutional investors: RealTick Pro (the firm’s futures trading platform), Sterling and Livevol X.

Account fees: Fees really hurt Lightspeed in our scoring rubric. Customers with less than $15,000 are charged a $25 monthly minimum commission fee, minus any actual commissions they paid during the previous month. Investors who want to upgrade to Lightspeed Trader from Lightspeed Web/Mobile will be subject to the $130 monthly platform fee mentioned above. Generate at least that amount in commissions and the fee is waived.

There are also fees on retirement accounts: a $20 IRA opening fee, $95 closing fee and $35 annual fee (although the annual fee is waived for the first year).

Investment selection: While Lightspeed gets recognized as one of the few brokers we review that offers futures trading (on its RealTick and CQG platforms), there is a gaping hole in its offerings for average investors: It has no commission-free ETFs and offers zero no-transaction-fee mutual funds. That’s not surprising for a trader-focused broker, but it is a gap worth considering if these are on your list of must-haves.

How Lightspeed Trading stacks up

Trade Fee

$6.95

$6.95

Account Minimum

$0

$0

Promotion

60

60

days of commission-free trades with qualifying deposit

Trade Fee

$5.00

$5.00

Account Minimum

$500

$500

Promotion

None

None

No promotion available at this time

Is Lightspeed Trading right for you?

Lightspeed Trading is designed primarily for institutions, hedge fund managers and extremely active, high-volume day traders. Things that hurt the broker in NerdWallet’s rating system — high trading requirements, lack of no-transaction-fee ETFs, no portfolio-building guidance and few educational tools — don’t matter much to Lightspeed’s target clientele. But they are significant shortcomings for everyday investors shopping for a broker.

If you’re still interested, Lightspeed welcomes potential customers to request a demo account. Otherwise, active nonprofessional traders should check out TradeStation and Interactive Brokers; both offer inexpensive commissions and professional-grade trading tools that are a better fit for amateurs.

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