Lightspeed lives up to their name.
Log on to lightspeed.com and you will see there is a price comparison box that is constantly updating with Lightspeed offering the lowest commissions on a whole range of trades when compared with other major discount brokers. Clearly, they are marketing toward the professional speculator more than the ‘Joe Public’ investor. Lightspeed’s trading platform gives direct access dealing to equities,options, futures and Forex. It is a trading platform designed by traders for traders.
Price and effective speed of transaction are the battlegrounds in the fight for the American speculative dollar. Headline advertising of Lightspeed pricing offers 40 cents per 100 trades on stocks, 40 cents per contract on futures, 50 cents on options contracts and 0.1 of pip on ‘forex’ trades. This is deliberately the lowest price range for brokerage services and the major reason to give them a long hard look. But only if you are planning to make a living from full time trading. It is difficult for a trader to predict their exact dealing costs.Until recently, Lightspeed’s profit and loss calculations didn’t include commissions either. This is important because Lightspeed does not charge a flat fee per transaction in the way other brokers do. So rates vary with trading frequency too. They do include commission in their net P&L calculations and also provide a detailed execution cost breakdown in order to better help traders manage and minimize their total cost of trading.
Lightspeed not only offers exceptional rates but they are very reliable. There is no slippage between the actual market price and the chosen executing price, what you see is what you buy or sell for. They do not have enough customer service staff to answer the burgeoning needs of their professional customer base. So customers are having to queue a little longer, maybe one or two minutes, to speak to someone. They definitely do not have the support function to answer long term financial planning or basic life investment type questions nor do they want to at this time. Per their chief strategy officer Andrew Actman, “As a broker that caters to self-directed traders, we do not provide any investment or financial planning advice.”
Lightspeed brings several useful institutional research tools within its own platform. For example, net-order imbalance signals and a block-trade filters. The Nasdaq has its ‘Opening Cross’ and ‘Closing Cross’ filter while the NY Stock Exchange has a facility to highlight stocks with net order imbalances on ‘Market on Open’ and ‘Market on Close’. These tools list the stocks that have abnormal disparities in their buy to sell ratios, and potentially signal imminent price volatility either up or down. Lightspeed’s ‘order-imbalance’ tool pulls these stocks together on a single screen, and allows the trader cherry pick those that fit their strategy.
Lightspeed’s ‘Block Trades’ filtering tool has two sides. One shows when a trade of more than 10,000 shares takes place on any public exchange under any company ticker symbol. The other side can be customized to show only stocks that meet specified criteria. For example, the tool can be set to show stocks that are traded in volumes over 100,000 shares in say a 24 hour period. Many day traders have a “follow the market-maker” type strategy and need to track institutional activity in their targeted stocks. Such movements can signal that a major mutual fund player or other insider is causing price movements that can be profited from.
The Lightspeed ‘Knowledge Center’ is an excellent speculator resource. There, the interested watcher can find more than 2000 informative articles for building ‘the big picture’ for investors and traders alike. They cater to individuals and trading groups who trade from their own homes or offices. These guys care what customers are saying about them and seem willing to go that extra mile to make certain their customers are satisfied.
In Summary, Lightspeed has the best value commission structure, very few extra fees, excellent platform features, and they are definitely seeking to dominate the speculator end of the investment market. If you’re only an amateur, check out my Tradeking review, if you’re more experienced, check out my Zecco review for a good comparison broker to lightspeed.