Lime Financial: Tools and Features for Active Traders

Lime Financial is a brokerage firm that offers low-latency trading and an advanced trading dashboard for experienced traders. The platform allows for unlimited $0 commission trading on U.S.-listed stocks and exchange-traded funds (ETFs) and offers trading in a variety of other securities. Lime Financial generates revenue through various means but does not support fractional shares, forex, crypto, international stocks, or bonds. Please note that Lime Financial is not suitable for novice investors and does not provide proprietary or third-party research.

Basics

Lime Financial is a distinctive agency broker on Wall Street, setting itself apart from traditional broker-dealers by exclusively executing client trades without holding inventory in securities. Employing algorithmic trading, Lime Financial reacts to market events with remarkable speed, enhancing trade profitability in what is known as low-latency trading.

Lime Financial's Background

Established in 2000 to fulfill a hedge fund's need for volume, speed, and privacy, Lime Financial has evolved into a versatile brokerage firm. Initially catering to financial institutions, Lime now provides access to independent traders who prioritize quality execution. In 2020, Score Priority, a comprehensive financial technology and brokerage firm, acquired Lime's low-latency execution platform from Lightspeed Financial Services. Integrating these capabilities led to Score Priority's rebranding as Lime Financial, aligning its services with the needs of high-frequency traders and hedge funds.

Lime Financial Pros & Cons

Pros

• Unlimited $0 commission trading on U.S.-listed stocks and ETFs.
• Exceptional hedge-fund-level technology.
• Specialized low-latency trading platform.

Cons

• Not suitable for novice investors.
• Lack of proprietary or third-party research.

Usability

Investors can easily keep up with market news, sectors, and portfolio holdings using Lime Financial's user-friendly dashboard. Customization options extend to creating favorite stock lists. Both desktop and mobile platforms allow convenient account monitoring. While customization includes stocks, screeners for ETFs, mutual funds, options, or fixed income are currently absent.

Trade Experience

Lime Financial empowers investors with a customizable trading dashboard offering screeners, alerts, and notifications. From the main dashboard, placing market, limit, or conditional orders is straightforward. Advanced investors benefit from indicators like the HTB designation. Speed is paramount for high-frequency traders, and Lime emphasizes low-latency trading through its platforms like Sterling Trader Pro and Metatrader 5.

Mobile Trade Experience

Transitioning from the dashboard to the trading screen is seamless on desktop, with a tab facilitating the shift. Mobile app users can initiate orders from their dashboard, albeit without multi-leg options on mobile.

Lime Financial’s Range of Offerings

Lime Financial supports trading in stocks, ETFs, options, and over-the-counter (OTC) stocks. Unlike traditional brokers, Lime acts as an agency broker, not holding securities, thus widening market access. However, fractional shares, forex, crypto, international stocks, and bonds are not supported.

Order Types and Trading Technology

Incorporating market access and low-latency execution, Lime Financial caters to benchmark strategies like Volume-Weighted Average Price ********(VWAP) and Percentage of Volume (POV). The platform offers algorithmic trading, granting quantitative traders access to diverse markets.

Costs

Lime Financial's pricing structure varies based on account type and trade. Notable fees include commission charges for trades, wire transfers, and account inactivity. Interest on cash, margin interest, and payment for order flow contribute to Lime's revenue streams.

Revenue Streams and Services

In an era of decreasing commission charges among brokerages, the sustainability of their business models may appear less obvious. Lime Financial employs several strategies to generate revenue while serving its clients effectively.

• Interest on Cash: When idle cash in your account, it doesn't accrue interest. While Lime Financial lacks a cash sweep program, you have the option to manually select a money market fund from five available funds and transfer your funds accordingly.
• Margin Interest: Lime Financial maintains competitive margin interest rates. Balances under $10,000 incur a 12.25% rate, while balances exceeding $250,000 are charged at a 10.00% rate.
• Payment for Order Flow (PFOF): Lime Financial participates in the payment for order flow practice, where brokers receive compensation from market makers for directing equity and options orders. Lime Financial's average compensation for stock transactions is $0.00056 per share. Notably, this practice doesn't apply to options.
• Stock Loan Programs: Lime Financial has introduced a stock loan program, a lucrative revenue source for brokers. This program involves lending stocks from customer accounts to other traders or hedge funds, often for short sales. While specific details are undisclosed, this initiative contributes to Lime Financial's revenue generation.
• Price Improvement and Portfolio Margining: Although Lime Financial doesn't reveal its price improvement practices, it offers portfolio margining for eligible customers. This innovative service calculates real-time margins for stock and options trades based on risk, deviating from traditional fixed percentage models.

Through these diverse revenue streams and specialized services, Lime Financial navigates the evolving landscape of brokerage services while ensuring value for its clients.

Conclusion

Lime Financial excels in serving experienced traders seeking low-latency execution. Its focus on high-volume, high-frequency traders aligns with its strengths, making it less suitable for newcomers. Lime Financial's unique approach, hedge-fund-level technology, and commitment to low-latency trading set it apart. Aspiring investors should weigh their experience and objectives to determine if Lime Financial is the right fit.