Events

It’s true that as the year winds down the markets see overall less trading volume. Market holidays and family vacations ensure things are quieter. But days off with the family and market closures don’t necessarily equate to a lack of significant events as we head into the end of the year.

”  day as well as a major day for index rebalances. On that day, Lime Trading hit a 

 in the last 15 minutes leading up to the closing bell—

In addition, December 31 is both the end of Q4 and the last day of the year. Year-end/end-of-quarter falling on the same day is typically when fund managers make big final adjustments for portfolio positions and tax considerations. It’s also an election year, a time when markets typically see positive returns in the latter half of December.

In short, a lot can and does happen in December. As Johan Sandblom, President and Head of Business Development for Lime Trading puts it: “It is a misconception that there is nothing going on in the markets in December.” 

For more, check out the December edition of 

Interested in learning about how Lime Trading can support your low latency US equities and options trading strategies? We’d love to hear from you. Contact 

Lime trader

What to Watch in Equities Markets as the Year Winds Down

Lime Trading’s dynamic CEO Eva Sehic has been central to our company’s success. We’re happy to announce that she was recently recognized as one of the winners of the 

We had the pleasure of sitting down with Eva where she walked us through her vision for the future as well as what’s challenging today about creating innovative technology in a sometimes risk-averse industry. 

Q: Name one lesson you’ve learned about balancing innovation with the complexities of global markets? 

: One key lesson I’ve learned is the importance of partnerships. Continuous product innovation is a crucial part in being successful in creating the balance. However, I have found that creating a strategic ecosystem of partners who will allow you to scale more quickly and sustainably in increasingly competitive and regulated markets is even more important in achieving that golden balance. 

Our global markets are quite complex and regulated. When we work together, companies can solve much bigger, more complex challenges, allowing us to maximize our competitive advantage and deliver better experiences and results for clients of all shapes and sizes. 

Q: What qualities or habits have been key to your success as a leader in such a dynamic field? 

: Adaptability, curiosity, and resilience have been pivotal to my success. The financial industry evolves rapidly, so staying informed and open to new ideas is essential. I’ve also learned that building strong, collaborative teams is key, surrounding myself with diverse thinkers and empowering them to share their ideas fosters a culture of innovation. Consistently learning, leading by example, and being willing to pivot when needed have allowed me to thrive in this dynamic field.

Q: What excites you about the financial industry? 

: What excites me most is its potential to shape the future of global economies, corporations, and individuals. The rapid advancement of technologies like AI, blockchain, and machine learning is transforming the industry, making it more efficient, transparent, and accessible. 

There is a real opportunity to create innovative solutions that drive positive change, both for financial institutions and individuals seeking to empower their financial futures. I’ve been part of this industry for decades and have lived through some significant market and historical events. But, seeing this “brave new world” emerge is quite exciting. We have a front row seat in watching the application of digital technology to financial services, and have a unique opportunity to aid in reimagining the future of global markets as we know them through digital innovation. 

Q: What lessons have you learned from working in your industry that you’d like to share? 

: The importance of perseverance in the face of resistance. 

It’s human nature to reject change and embrace safety. Financial markets can be traditional and slow to accept change, and it can be challenging to introduce new ideas. However, persistence—paired with a clear vision and strategic partnerships—can lead to exciting breakthroughs. It’s essential to remain patient and trust your innovations, even when it takes time to see results. 

The key is to keep pushing forward, adapt as necessary, and remain focused on long-term goals. 

To learn more about how Lime Trading can support your low latency trading strategies, contact sales@lime.co or call us at 646-558-3434.

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Awards

Lime Trading CEO Eva Sehic Receives the 2024 Women in Finance 'Excellence in Innovation Award'

Lime Trading Corp President and Head of Business Development, Johan Sandblom, recently participated in the 

 conference in Frankfurt, Germany. In addition to exhibiting at a booth, he gave a Master Class in the US equities and options markets and the impact of latency on execution quality. It was a very well attended event with thousands of attendees eager to learn more about tools and services that can help them trade more efficiently. There is significant global interest in trading across all skill and experience levels. 

He identified three key themes that everyone wanted to know about: 

•	Working with the right broker for low latency market access 

With more than 20 years of experience in the market, Lime Trading offers a wide range of products and services that provide flexible solutions, trusted technology and great service for low latency market access that meet the needs of the global trading community. We have an API solution for any skill level from REST API, Python, and C++ to FIX and advanced binary connectivity.

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Our team had great, engaging conversations throughout the event about these trending topics and specifically our back-testing environment, access to real time market data, our wide-range of APIs, trading technology, infrastructure, reliability, the importance of low latency solutions for direct-market-access (DMA).

During the event, Johan observed a great interest in Lime Trading’s products and services. “There is an enormous interest in trading and people are very curious about learning and understanding the market better so they can implement their trading strategies through efficient technologies and brokerage services. 

During our Master Class discussing the US markets in particular, the audience had great interest in understanding the US Equity and Options landscape, the infrastructure and trading applications around it, and how important a low latency solution is to get execution quality. The topic that created the most reaction was the importance of latency to the markets as it can affect queue positioning, cost management, and ultimately the overall performance of the strategy.”

We want to thank the World of Trading team for putting together a great event and thank everyone who stopped by our booth and participated in the Master Class for the thoughtful and engaging discussions about trading in the US markets.  

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Event Recap: World of Trading - Germany

As investment tools become increasingly democratized, traders have more opportunity than ever to challenge the status quo.

As we see an increase of those retail traders, the industry has to meet the opportunity and the increased demands right along with it.

Free trades may have been enough of an allure to drive new business to platforms, but those days seem to be headed to a quick close. Today’s increasingly smart and experienced retail traders are seeking execution quality.

Per Lime Trading president Johan Sandblom: “We now hear questions from retail about what type of application programming interfaces (APIs) are offered for their automated strategies, what order capacities are, questions around various order types, how orders are processed, what latencies are, and how all of it impacts their overall execution.”

To learn more about how Lime Trading can support your low latency trading strategies, contact 

Execution Matters: Innovation Driving Retail Traders

Driven by retail participation (which saw an increase from about 35% of the market pre-pandemic to 40-45%), retail options trading remained strong through September. Per Director of Research at NYSE Steven W. Poser in a December 2023 report, post-pandemic data “suggests that substantial retail options trading is here for the foreseeable future.”

What does that mean for low latency stock options trading providers? As noted in Trader’s Magazine, Johan Sandblom, President and Head of Business Development at Lime, “Retail is becoming smarter.”

“For many investors, trading options isn’t an alternative but an addition to their traditional equity portfolios,” Sandblom continued. “That is why we make it easy to trade both asset classes through a single API (application programming interface). 

We want our traders to be able to focus on their strategy, so we design our tech to make it easier for them to do just that

For more about how traders can stay informed and prepared in the current options trading landscape, please check out more in the latest edition of Execution Matters:

To learn more about how Lime Trading can support your low latency US options trading strategies, including multi-leg options and shorter maturities, contact 

Execution Matters: US Options Trading Volumes Remains Strong in September 2024

 – Lime Trading Corp “Lime Trading”, a leading agency broker delivering fast, reliable and scalable direct market access to the US equities and options markets, announces the appointment of Eva Sehic as Chief Executive Officer and Johan Sandblom as President and Head of Business Development. These appointments reinforce Lime Trading’s commitment to optimizing business operations to best serve the trading community and deliver continuous product innovations that empower sophisticated retail traders alongside institutional clients.

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Eva Sehic is a proven leader with extensive experience leading mission-critical business operations in complex global markets at renowned firms including Goldman Sachs and Deutsche Bank. Since joining Lime in September 2023, she has achieved significant cost containment, operational efficiency, and collaborative strategy development, laying a solid foundation for further innovations.

“I am honored to lead alongside Johan to deliver unmatched execution quality and hightouch client services and am committed to growing our community of sophisticated traders via both our screen trading platform (Lime Trader) and our trading technology suite (Lime Direct).” She continued, “I have truly enjoyed getting to know the Lime Trading team am eager to further our mission to serve our diverse community of traders, partners, and employees.”

As President, Johan Sandblom — who has championed Lime execution technology for nearly two decades — will focus on fostering growth and innovation through enhanced product development and deeper collaboration with the trading community.

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“The essence of Lime Trading’s success lies in the transparent, collaborative relationships we cultivate with our clients,” stated Johan Sandblom. “Our leading-edge execution technology ensures top-tier performance for both retail and institutional traders, positioning Lime Trading as the ideal partner for ambitious traders at every level—from emerging retail traders and systematic novices to established hedge funds and market makers.”

Lime Trading was established in 2000 by hedge fund traders who couldn’t find a brokerage firm to meet their needs for volume, speed, and privacy — so they created one. Today, Lime Trading is expanding competitive access to everyone who values quality execution. Lime is filling a void between the bulge bracket banks and retail brokerage firms for sophisticated traders that need fast, reliable, compliant, scalable access to the US equities and options markets. 

Lime continues to evolve and expand its offering for traders of all strategic approaches with recent additions of VPS offerings, Python coding languages for its popular retail trading API, and introducing new order types – a direct result of their collaborative client relationship approach. Looking forward, Lime continues to expand its offering to remain at the leading edge of trading technology worldwide.

For more than twenty years, Lime Trading has been focused on developing tools and technology to enhance traders’ access to markets. Through their suite of products and services including a broad range of APIs, platforms and technology solutions, Lime Trading partners with retail and institutional traders to execute trading strategies at the speed they need and execution quality they can trust. With no commission on U.S. equity trading, Lime is uniquely positioned to provide fast, cost-effective access to the markets. Lime Trading Corp is an SEC-registered broker-dealer, member of FINRA/SIPC/NFA.

Lindsey Becker, Chief Marketing Officer at Lime Trading

Lime Trading announces the appointment of Eva Sehic as Chief Executive Officer and Johan Sandblom as President and Head of Business Development. 

Lime Trading Corp Strengthens Leadership Team with Key Executive Appointments

Quadruple (or “quad”) witching day occurs quarterly when four major financial instruments simultaneously expire: stock index futures, stock index options, stock options, and single stock futures. 

It is, for some context, a Black Friday event for electronic brokers and trading tech providers. 

It’s why Lime Trading’s systems were built with enough redundancy and stability to handle the traffic and headwinds for one of the most challenging days for traders all year. 

Our low-latency platform was engineered to handle these exact conditions, with systems that can “meet the demands of systematic and electronic traders,” said Johan Sandblom (president and head of business development. “On the most active trading days, we routinely process over 30 million messages, with much of the volume concentrated toward the market close. The platform enables our clients to execute their strategies without bottlenecks, even during events like quad witch.” 

Execution Matters Beware the Quad Witch

Growth stocks are tricky. They provide head-spinning rallies on the up, and stomach-churning drops on the down. Investors can be miffed by this conundrum – why have we seen a 53% (NFLX) and 40% (TSLA) trailing-24 month drop in prices when the companies haven’t changed? Even when the Nasdaq index fell 13% and the SP500 gained 3% over the same period of time? Well, there’s a graybeard answer for this: value stock prices reflect what the company is, but growth stocks prices reflect what the company is expected to be.

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Few names have reflected this growth-stock rollercoaster better than Netflix and Tesla. Both companies are disruptors in century-old industries. Netflix broke patterns of movie production and broadcasting with their streaming service (and back in the day, with their “rent by mail” DVD service). Similarly, Tesla broke the mold of conventional internal combustion engine (ICE) vehicle manufacturers with a radical combination of battery-based electric motors and a novel high-tech driver’s experience.

This creative disruption gave both companies growth that is very rarely seen in companies of that size. Each of them managed a double whammy of:

Netflix and Tesla’s revenue line grew at an annualized 24.6% and 51.7% compounded annual growth rate (CAGR) between 2015 and 2022, respectively (note: for Tesla, the figure reflects the 12-months to 30 Sep 2022), on the back of an increase in Netflix’s subscriber base to 230.8m from 74.7m and Tesla’s new car sales of 1.3m from about 25k.

But as good as growth is on the up, it can be a destructive “stick in the spokes” when it falls short.

 Because growth stocks are priced according to what the company is expected to be in 3, 5, or 10 years from now, even small changes in expansion expectations have a compound effect over a longer period. Cutting estimates from a 50% to 25% annualized growth rate means that a revenue line that is 5-years out can drop from 7.6x to only 3.0x today’s number. Still impressive, but less than half prior expectations.

Rapid growth is a challenge for mega-caps – and often proves elusive

. Both these names already accumulate overwhelming market shares in the US market and face regulatory or competitive restrictions to grow abroad. Therefore, their expansion depends on both their capacity to continue growing their main business and/or expanding their product portfolio. For example, Netflix has, for a time now, expanded from pure streamlining into original productions and there is a full field ahead with live events (sports?) for the company to explore. Similarly, Tesla has so far focused on high-end personal cars and could look at commercial vehicles and cheaper alternatives – particularly as it competes in emerging markets with low-cost producers from China. But new ventures imply new risks and capital deployment with uncertain results.

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Moreso, stocks don’t care about units sold or customers connected – they care about the money made by doing so, and margins erode after the head-start is over. It is not a new phenomenon – practically every new business disruptor has a period of high margins as competitors are slow to react. For example, Tesla operates with a 26.6% gross profit margin compared to 12.1% and 14.8% for Ford and General Motors, respectively. That means that Tesla has about the same gross operating profit as F and GM despite having about half the revenue. But as incumbents and second-wave disruptors begin competing in earnest (Ford and GM as incumbents, and Rivian and Lucid for second-wave disruptors for Tesla), these high margins are challenged as companies are forced into price cuts or increasing operating expenses to defend market share (for example, Netflix’s original productions to compete with pre-existing catalogs like Disney+).

All of this to say, the case for high-quality growth stocks can be great, as they will likely, over the long run, provide excess returns for investors. However, as the market adjusts for new growth expectations, be prepared for major bumps in the road along the way. It is important for traders to regularly assess these growth stocks to determine for themselves whether these potholes are worth hitting.

The case for high-quality growth stocks can be great, as they will likely, over the long run, provide excess returns for investors.

What’s the deal with growth mega-caps?!

What If We Expect a Robust Rally or Deep Sell-Off?

At the start of the summer in Issue 1, Make or Break Summer for Stocks (July 20), we presented a “bifurcated outlook” strategy, which is based on investors’ expectations of either a strong rebound, (swim), or further sell-off, (sink), following a dreadful first half of 2022.

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Initially, stocks attempted to swim but the rally faltered, and stocks sunk. Between July 20 and September 30, the SP500 fell 9.5%. As a result, the strategy worked well as the underlying index fell more than the 5% threshold required to accrue a profit.

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To investors who remain in a “bifurcated outlook” mindset (i.e., expecting a big move but in an uncertain direction), this strategy remains a viable way to position their investments.

The strategy (i.e., technically, a “short condor”) can be deployed with any underlying security with an active options market, such as the index-tracking ETFs SPY (S&P500), QQQ (Nasdaq), and IWM (Russell 2000).

This position is relatively aggressive. It provides a profit if the underlying security gains or loses 5%+ but could lead to a 100% loss if the market trades sideways.

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Depending on the equity market performance, as reflected in the indexes tracked by each ETF, each position would have a maximum value of $2,000 at expiration if the move is above approximately 10%, $0 if the move is between +5% and -5%, and at pro-rata for intermediate performances.

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What could go wrong with this type of strategy?

This strategy is aggressive. It requires a significant move in the equity market to produce a profit and could lead to a 100% loss if the security (in the example, the index-tracking ETF’s SPY, QQQ, or IWM) fails to move more than 5% between now and year-end.

Sink or Swim Reloaded

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Traders need to be flexible in all types of market environments, whether bullish, bearish or flat. Options, especially multi-leg options, can provide traders with ways to customize their strategies to suit their views on the market’s direction.

Multi-leg options, also called complex options, simultaneously buy or sell options of the same underlying security. They offer traders three main benefits:

: Multi-leg options can save time in a fast-moving market. Instead of executing each leg of the options trade one at a time, traders can carry out a strategy with a single order and remove the time lag between each option entered manually. A slower trade using single-option orders can increase slippage as prices change between executions.

: Multi-leg options tend to be slightly less expensive than single-option orders because the proceeds the trader makes from selling options can offset some purchase costs. The flip side of this is that there will be slightly higher commission costs with multi-leg strategies, and profit ranges may be more limited than single-leg options.

: Multi-leg options allow traders more versatility in their trading by offering more tools in the toolbox to take advantage of bull, bear, and neutral markets. Traders can tweak strategies to limit or increase risk as well as maximum and minimum profits, allowing a wider range of trades that can be tailored to more scenarios.

Keep in mind that multi-leg options involve risk and are not suitable for all traders. Transaction costs may be significant in multi-leg options strategies, and advanced options strategies often involve greater and more complex risk than single-leg options. Losses with multi-leg options can be greater than the initial investment. Evaluate the benefits and drawbacks carefully.

In a flat market, these two multi-leg options strategies can be useful to traders and developers who want to take advantage of the conditions:

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: To create an iron butterfly, the trader buys one call option with a strike price above the target price, sells both a call and a put option using the strike price nearest the target price, and buys one put option with a strike price well below the target price.. Each option has the same expiration date. The strategy is not named after the band that sang “In-A-Gadda-Da-Vida.” It comes from the butterfly-like shape of the graph that illustrates the strategy’s profit and loss, with each leg of the trade looking like a wing, as you can see above.

: With an iron butterfly, you receive a net credit into your account immediately, and you minimize downside risk with this defined risk trade. The strategy earns the maximum profit when the underlying asset closes precisely at the middle of the strike prices at expiration.

: The iron butterfly limits risk, but also profitability. You need to close precisely at the middle of the strike prices to maximize profit.

: Let’s build an iron butterfly with an example of using Netflix stock, which traded at $173 per share in early May.

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1. If you think Netflix stock will stay close to $175 per share, you could buy a call option with a $177.50 strike price, sell a call option at a $175 strike price, sell a put option with a $175 strike price, and buy a put option with a $172.50 strike price.

2. This strategy would give you a $185 credit in your Lime Trader account.

: If, at expiration, Netflix stock closes precisely on the strike price of $175, you can earn $185, minus $2 commissions for the two wings of the iron butterfly.

: If Netflix stock stays between $173.15 and $176.85, you at least break even.

: If Netflix stock drops to $173.15 or below, or rises to $176.85 or above, you would lose a maximum of $65.

4. If the iron butterfly expires with Netflix stock between $173.15 and $174.99, you could end up with 100 shares, or if it expires with Netflix shares between $175.01 and $176.85, you could end up with short 100 shares, so you should manage these positions if you wish to avoid the exercise of the option.

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: Much like the iron butterfly, to create an iron condor, the trader buys one out of the money put and sells one put closer to the money put while buying one out of the money call and selling one call closer to the money. Each option has the same expiration date. The name comes from the bird-like shape of the graph that illustrates the strategy’s profit and loss, with each leg of the trade looking like a wing, as you can see above. You can think of this as a combination of credit call, and credit put spreads that surround a center range.

: With an iron condor, you receive a net credit into your account immediately, and you minimize downside risk with this defined risk trade. The strategy earns the maximum profit when the underlying asset closes between the middle strike prices at expiration. It can be modified to have a bullish or bearish bias.

: The iron condor limits risk, but also profitability. While the strategy is directionally neutral, the premiums can benefit from higher volatility. However, the higher premiums result from that greater risk in a highly volatile market.

: Let’s build an iron condor with the same example of using Netflix stock.

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1. If you think Netflix stock will stay in a range between $170.80 and $177.50, you could buy a call option with a $177.50 strike price, sell a call option at a $175 strike price, sell a put option with a $172.50 strike price, and buy a put option with a $170 strike price.

2. This strategy would give you a $170 credit in your Lime Trader account.

: If, at expiration, Netflix stock is between $172.50 and $175, you can keep that $170, minus $2 commissions for the two wings of the iron condor.

: If Netflix stock stays between $170.80 and $176.70, you at least break even.

: If Netflix stock drops to $170.80 or below, or rises to $176.70 or above, you would lose a maximum of $80.

4. If the iron condor expires with Netflix stock between $170 and $172.50, you could end up with 100 shares at $172.50, or if it expires with Netflix shares between $175 and $177.50, you could end up with short 100 shares at $175, so you should manage these positions if you wish to avoid the exercise of the option.

Use a Broker Built for Multi-leg Option Strategies

Deploying multi-leg options strategies is easier when traders have a broker designed to handle them smoothly. The ease of executing multi-leg options strategies depends on the broker’s configuration. Traders should be aware of commissions owed and the broker’s margin requirements. Executing as one order allows a trader to avoid entering into a position without the worry of not getting executed on one of the legs.

Lime Trader is designed to make multi-leg options trading more accessible. The platform executes simultaneously to reduce execution risk. Lime Trader’s position management features let you select and open, close or roll option legs. The position views provide rollup calculations by strategy and underlying assets to track your portfolio’s P&L and Greek values.

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Stock symbols and company names displayed are for illustrative purposes only. 

Multi-Leg Options Strategies in a Flat Market

 What Multi-Leg Options Strategies Can Help in a Flat Market

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. As the herd retreats, many overlook the value of using multi-leg options strategies to potentially limit risk and generate profit in bear markets.

Multi-leg options, also called complex options, simultaneously buy or sell options of the same underlying security. They have many benefits, including:

: Multi-leg options allow traders more versatility in their trading by offering more tools in the toolbox to take advantage of bull, bear, and neutral markets. Traders can tweak strategies to limit or increase risk as well as maximum and minimum profits, allowing a wider range of trades that can be tailored to more scenarios. Multi-leg options involve risk and are not suitable for all traders. Transaction costs may be significant in multi-leg options strategies, and advanced options strategies often involve greater and more complex risk than single-leg options. Losses with multi-leg options can be greater than the initial investment. Evaluate the benefits and drawbacks carefully.

 Two Multi-Leg Options Strategies for a Bear Market

Lime Trading Corp. is a registered broker-dealer and member of <a href="https://www.finra.org/" target="_blank">FINRA</a> and <a
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Options involve risk and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please review the <a
 href="https://www.theocc.com/Company-Information/Documents-and-Archives/Options-Disclosure-Document"
 target="_blank"
 >Options Clearing Corporation Options Disclosure Document</a
 > for the risks associated with trading options. Hedging and protective strategies generally involve additional costs and do not assure a profit or guarantee against loss.
With long options, investors may lose 100% of funds invested. Covered calls provide income,
downside protection only to the extent of the premium received, and limit upside potential to the strike price plus
premium received. Multi-leg option orders are not a standard option trade. There is no national best bid or offer for
multi-leg orders. Multi-leg trades are executed on the exchanges at the discretion of specialists or market makers, who
cannot be held to a net price on a multi-leg order. Therefore, you may not receive the national best bid or offer on
each individual leg of an order. Multi-leg orders are executed as a single trade on the same exchange. Legs cannot be
executed separately on different exchanges to get the national best bid or offer for each leg. Each individual leg of a
multi-leg order can be subject to early exercise risk, possibly taking away the protection that the multi-leg position
may provide. Partial or full assignment on a leg may originate a margin call or losses greater than you anticipated when
you entered into the position. When a multi-leg order is canceled or filled, additional reporting may be required by the
specialist or market maker. Reporting fills and cancels may cause delays and create risks, especially in fast moving
markets. Other risks might be associated with multi-leg options trading.