Mitigating Investment Risk Using Lightspeed’s Risk Management Software


By: Montana Timpson

While diversification and asset allocation can improve returns, systematic and unsystematic risks are inherent in investing. Risk management is a crucial process used to make investment decisions involving identifying and analyzing the amount of risk involved in an investment, and either accepting that risk or mitigating it. Understanding these metrics can help professional investors differentiate high-risk investments from stable ones. Here’s how Lightspeed Risk can help.

Investment Risk Management
Professional traders, financial advisors and companies can all develop risk management strategies to help manage risks associated with their investments and business activities. 

Various strategies for professional traders include diversification and derivative positions alongside analysis of fiscal measurements like standard deviation, beta and Value at Risk. Risk management software is often utilized to help automate the risk analysis process and can serve as a key tool in monitoring and managing risk exposure across markets and asset classes in real-time.

Lightspeed Risk Management Software
Just last year, Lightspeed launched the Lightspeed Risk Suite, a collection of risk management applications allowing users to monitor profit, loss, halted trading symbols and real-time trading activity.

Lightspeed Risk, a web-based intra-day risk monitoring tool designed for portfolio margin accounts and advanced options risk. Lightspeed Risk gives Lightspeed Trader users the capability to monitor margins accurately and efficiently, helping trade managers and risk supervisors manage risk across multiple accounts.

Lightspeed Risk provides a litany of risk management features and functions, including a symbol monitoring system, granting visuals of traders’ exposure to a particular symbol of interest, and a Trade Watcher with a real-time scrolling view of executions per trading group. Lightspeed Risk also provides users with access to an automated real-time short locate system and allowing for electronic requests. Other functions include an equity ratio monitor, displaying real-time profit or loss as a percentage of total account value, and adjustable trading limits allowing users the ability to set custom P&L and position sizes.

In addition to Lightspeed Risk, Lightspeed offers the Options Risk Manager, a proprietary risk and leverage management tool offering options traders and portfolio margin clients access to order execution. Lightspeed’s Options Risk Manager is an order execution, risk and position management system designed to address option risk management and margin monitoring, real-time portfolio margins and day trading margins.

The Options Risk Manager’s real-time portfolio margin allows managers to monitor each asset class for excessive risk on a summary tab and view real-time requirements on individual positions. The day trade margin tool calculates day trade margin requirements in real-time and displays various metrics to assist trading groups with liquidation decisions from positions subject to Day Trade Margin. On the screen, users are able to view data in a summarized format for the entire group or evaluate individual positions that are ranked by margin requirement.

Alongside Lightspeed Risk and Options Risk Manager in the Lightspeed Risk Suite is Auto Risk, an application which allows a trade manager to set differing predefined trading parameters and limits for different users on the Lightspeed Trader platform. Some of these parameters include profit and loss, position size, number of open positions, pre- and post-market trading and various exchanges. Once limits are reached, automatic action triggers, making Auto Risk a key tool for those seeking self-activating risk management.

For more information regarding the Lightspeed Risk Suite, contact a member of our team at [email protected]. For more professional trading insights, check out Lightspeed’s Active Trading Blog and register now for our next live webinar. 

Active Trading with Lightspeed
Lightspeed provides professional traders with all the tools required to help them find success in stock trading, and we have been developing and honing our active trader platform to offer an optimal user experience. With the intuitive interface layouts and institutional quality stock and options scanners, we aim to help traders reach their goals, no matter what their strategy is. We also offer our clients some of the lowest trading fees in the industry. 

For more information on a professional trading platform with Lightspeed, please call us at 1-888-577-3123, request a demo, or open an account.

Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content are solely based on the users’ independent analyses taking into consideration your financial circumstances, investment objectives, and risk tolerance.

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