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FAQs

Everything you need to know about Light Horse platform and the stocks, ETFs, and crypto currency we sell.
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Account Opening
1. What types of accounts can I open?

Light Horse Securities provides two types of accounts: Cash and Margin accounts. A Cash account requires securities to be paid for in full with the available cash in your account. This option has the advantage of avoiding interest charges, but it comes with limitations such as the inability to borrow funds or engage in short selling. On the other hand, a Margin account allows you to buy securities using borrowed funds. This provides the advantage of increasing your purchasing power or leverage and offers more investing options like short selling. However, it is important to note that Margin accounts are subject to paying interest on borrowed funds.

2. How long does it take to open a broker account?

Typically, new accounts can be approved in minutes as long as the account application is filled out completely and the information is verified. The process may take a little longer if there are difficulties verifying information. We strive to make the account opening process as easy and quick as possible for our customers. We will contact you if there are any issues preventing the initial account opening.

3. Who can open an account?

Individuals eligible for this service include U.S. citizens, U.S. residents, and foreign citizens aged 18 or older who possess valid identification, such as a passport, along with proof of residency (e.g., utility bills for gas, electric, or water).

4. How do I open a trading account?

From the Light Horse Securities App, select the Trade tab from the bottom of the page, then click Open Account. The app will guide you through the account opening process.

5. What are the funding requirements to open a new account?

For a cash account our minimum ACH deposit is $50. Margin accounts have a $2000 dollar minimum and for Day Trading Margin accounts it is a $25,000 minimum.

6. How can I update my account information?

Please send an email to support@lighthorse.io to request an update of your personal information.

7. Can Foreign citizens open accounts?

Yes, Foreign Citizens can open accounts and must provide their Passport, U.S. Visa, National ID, Utility phone number and  proof of residency (e.g., utility bills for gas, electric, or water).

8. Can I open multiple accounts? Light horse does not currently support multiple accounts per customer.
Account Funding
1. What are the ACH fund transfer limits? 

Light Horse Securities has a $50 ACH deposit minimum with daily maximum deposit limit of  $50,000.00.

2. When are my funds available to trade with?

Deposits via wire transfer are available the following business day they are posted to your account. Initial account funding deposits made by ACH through Instant Account Verification can be used immediately for trading up to our instant deposit limit which is 1,000 dollars, depending on your current balance. Any deposit amount over the Instant deposit limit will be available 5 business days after you initiated the transfer.

3. How can I fund my account?

You can fund your account by Wire or ACH.

4. What are the wire instructions to deposit funds into my account?

For Domestic or International wires, please login to the Light Horse Securities app and go to the Home tab located at the bottom of the screen, then select the Transfer button at the top of the screen. From here, select Deposit then Deposit by Wire and you will find the wire instructions.

5. What is an ACH transfer?

An ACH transfer is a free electronic movement of funds between two financial institutions. Automated Clearing House is a national electronic system for financial transactions that eliminates older processes of transferring funds, which were slower and had higher cost. After setting up your ACH you can securely deposit and withdraw funds with your account for FREE.

6. How do I set up ACH transfers for my account?

Login into the Light Horse Securities app and go to the Home tab located at the bottom of the screen, then select the Transfer button at the top of the screen. From here, select Deposit and  then follow the in-app instructions to set up ACH.

7. How long do ACH transfers take to complete?

ACH transfers generally take 1-3 business days.

8. How long does it take to set up an ACH?

Initial ACH setup with larger financial institutions can be immediate. Initial ACH setup with smaller institutions involves verification through micro deposits which can take up to 5-7 business days.

9 Can I fund my account with a credit card?

No, you may not fund your account with credit cards, debit cards, or online payments such as PayPal.

10. Do you accept third party transfers?

No, we do not receive or distribute funds with third party accounts under any circumstances.

11. What is the cut off time to process a wire or ACH transfer?

Wire/ACH transfers must be submitted no later than 2:30 PM Eastern Time to be processed the same day. Any wire/ACH transfer submitted after the cutoff time will be processed the following business day.

12. What currency can I deposit in my account?

Light Horse Securities only accepts deposits in USD.

13. Why was my deposit reversed?

The most common reasons for ACH reversals are Insufficient Funds, Stop Payments, and Duplicate entries. Please note all ACH reversals/returns are subject to a $30 fee.

14. Does the Light Horse Securities accept cash app?

Light Horse Securities does not directly accept Cash App as a form of payment. You can fund your account by Wire or ACH deposit .

15. How to link my bank card?

If you have a US bank card, you can link your bank card to the initial ACH deposit, and make deposit and withdrawal through ACH.

To verify your bank card, Login into the Light Horse Securities app and go to the Home tab located at the bottom of the screen, then select the Transfer button at the top of the screen then follow the in-app instructions to set up ACH.

16. How to deposit in my account?

You can deposit and withdraw funds from your Light Horse Securities app by logging into the Light Horse Securities app then go to the Home tab located at the bottom of the screen, then select the Transfer button at the top of the screen. On the screen you can select Deposits and you will be shown several ways to add funds.

17. How do I transfer money received from closed positions to my bank account?

To transfer the funds from closed positions to your bank account, you would need to log in to the Light Horse Securities app then go to the Home tab located at the bottom of the screen, then select the Transfer tab at the top of the screen. On the transfer screen you can select withdraw and you will be shown several ways to withdraw funds.
Trading
1. When can I trade on the system?

Currently you can place trades from 4:00 am – 8:00 pm Eastern Time.

2. What is a Bid/Ask Price?

The bid/ask price, also known as the bid/ask spread, is a fundamental concept in financial markets, especially in the context of trading securities such as stocks, bonds, currencies, and commodities.

Here's a breakdown of what bid and ask prices represent:

Bid Price: The bid price is the highest price a buyer is willing to pay for a security at a given moment. It represents the price at which a trader can sell their security if they are looking to exit their position immediately. In other words, if you're selling a security, the bid price is the price you'll receive for it.

Ask Price: The ask price (also known as the offer price or the ask) is the lowest price a seller is willing to accept for a security. It represents the price at which a trader can buy the security if they are looking to enter a position immediately. If you're buying a security, the ask price is the price you'll pay for it.

The difference between the bid and ask prices is called the bid/ask spread. This spread represents the transaction cost of trading a security and is essentially the profit margin for market makers and brokers.

For example, let's say the current bid/ask prices for a stock are $10.00 (bid) and $10.05 (ask) respectively. This means that buyers are willing to buy the stock for $10.00 per share, while sellers are asking $10.05 per share. The bid/ask spread in this case is $0.05.Understanding bid and ask prices is crucial for investors and traders as they navigate the financial markets, as these prices directly influence the execution price of trades and overall trading costs.

3. Can I short stock?

Yes, you can short a stock if you have a margin account and if the stock you want to short is available for shorting. In order to short sell, attempt a long sell like normal. Our system will automatically detect if you’re eligible for short selling. The prerequisite is to not have any securities of the company prior to short selling otherwise your securities will be sold first. Short selling is a trading strategy where you borrow shares of a stock from your broker and sell them on the open market with the expectation that the stock price will decline. If the stock price does indeed fall, you can buy back the shares at a lower price to return them to your broker, profiting from the difference. However, short selling carries significant risks, including unlimited potential losses if the stock price rises instead of falls. It's important to fully understand the risks and requirements associated with short selling before engaging in this trading strategy.

4. Can I trade foreign stock or on international exchanges?

Unfortunately Light Horse Securities does not currently trade foreign securities or on foreign exchanges.

5. Can I trade ETFs?

Yes, US exchange listed ETFs are available for trading.

6. Can I trade preferred stock?

Yes, trading in preferred stock is available.

6. What is Buying Power?

Buying power, also known as purchasing power, refers to the amount of capital an investor has available to purchase securities or other financial instruments in a brokerage account. It represents the total funds that can be used for buying investments after considering factors such as cash on hand, margin borrowing capacity, and unsettled funds.

Buying power is influenced by several factors:

Cash Balance: The cash balance in the brokerage account represents the amount of money available for purchasing securities without borrowing on margin. Buying power equals the total cash balance minus any unsettled funds from recent trades.

Margin: If the investor has a margin account, they may have access to additional buying power through margin borrowing. Margin allows investors to borrow funds from their broker to buy securities, effectively increasing their buying power. However, margin borrowing also entails interest costs and carries additional risks, including the possibility of margin calls if investments decline in value.

Settlement Period: After executing a trade, it takes time for the transaction to settle, during which the funds used for the trade are considered unsettled and not available for immediate use. Once funds from a trade settle, they contribute to the investor's buying power.

Securities Held: Certain securities, such as stocks and exchange-traded funds (ETFs), may have specific margin requirements based on factors like volatility and liquidity. Holding these securities in the account can affect the available buying power.

Understanding buying power is essential for investors to effectively manage their portfolios, make informed investment decisions, and ensure compliance with margin rules and regulations. Investors should carefully consider their risk tolerance, financial goals, and available buying power when trading securities or using margin.

7. What is a Stock?

A stock, also known as a share or equity, represents ownership in a corporation. When you buy a stock, you are purchasing a small piece of ownership in the company.

Here are some key points about stocks:

Ownership: Stocks represent ownership in a company. As a shareholder, you are entitled to a portion of the company's assets and earnings. Shareholders may also have the right to vote on certain company decisions, such as the election of the board of directors.

Types of Stocks: There are two main types of stocks: common stocks and preferred stocks. Common stocks represent basic ownership in a company and typically come with voting rights. Preferred stocks usually do not have voting rights but have a higher claim on the company's assets and earnings.

Stock Prices: Stock prices fluctuate based on supply and demand in the market. Factors such as company performance, economic conditions, industry trends, and investor sentiment can influence stock prices. Stock prices are quoted in real-time on stock exchanges and may change throughout the trading day.

Dividends: Some companies distribute a portion of their profits to shareholders in the form of dividends. Dividends are typically paid quarterly and are based on the company's earnings and dividend policy. Not all stocks pay dividends, and dividend payments are not guaranteed.

Risks and Returns: Investing in stocks carries risks, including the risk of loss of principal. However, stocks also offer the potential for higher returns compared to other investment options over the long term. It's important for investors to conduct thorough research and consider their risk tolerance before investing in stocks.

Marketplaces: Stocks are traded on stock exchanges such as the New York Stock Exchange (NYSE) or the Nasdaq Stock Market. Investors can buy and sell stocks through brokerage firms, online trading platforms, or financial advisors.

Liquidity: Stocks are considered liquid assets because they can be easily bought and sold in the market. The liquidity of a stock refers to how quickly it can be converted into cash without significantly affecting its price.

Overall, stocks play a vital role in the financial markets and are a common investment vehicle for individuals, institutions, and funds seeking to build wealth and achieve long-term financial goals.

8. What is a Bid?

Bid Price: The bid price is the highest price a buyer is willing to pay for a security at a given moment. It represents the price at which a trader can sell their security if they are looking to exit their position immediately. In other words, if you're selling a security, the bid price is the price you'll receive for it.

9. What is an Ask price?

Ask Price: The ask price (also known as the offer price or the ask) is the lowest price a seller is willing to accept for a security. It represents the price at which a trader can buy the security if they are looking to enter a position immediately. If you're buying a security, the ask price is the price you'll pay for it.

10. What is an EM call?

An Equity Maintenance call is when a Patterned Day Trading accounts balance falls below the $25K minimum requirement.

11. What is a RM call?

A Required Maintenance call is when the equity in an account is below the minimum maintenance requirements for open positions.

12. Can i place an order by phone?

Unfortunately we do not allow trade orders by phone at this time.

13. Why was my order compliant with price requirements during pre-market and after-hours trading, yet remained unfilled? 

There are several reasons why an order might not be filled during pre-market or after-hours trading: 

Lack of Liquidity: During pre-market and after-hours sessions, trading volumes are typically lower compared to regular trading hours. As a result, there may be insufficient liquidity in the market, making it challenging to find a counterparty to execute the trade at the desired price.

Price Volatility: Securities often experience increased price volatility during pre-market and after-hours trading due to fewer market participants and limited trading activity. This volatility can lead to significant price fluctuations, causing orders to be executed at prices different from the quoted or desired price.

Order Type: The type of order placed may affect its execution during pre-market or after-hours trading. For example, if a market order is used during times of low liquidity or high volatility, it may be filled at prices significantly different from the prevailing market price.

Time Priority: Orders are typically executed on a first-come, first-served basis, with priority given to orders placed earlier. If there are existing orders ahead of yours in the queue, your order may not be filled until those orders are executed.

Price Requirements: Even if an order meets price requirements during pre-market or after-hours trading, it may still not be filled if there are no matching buy or sell orders at that price point.

Technical issues: When placing an pre-market or after-market order, the extended hours function must be selected otherwise your order will fill when the market opens.  

14. Why am I unable to sell my position in my cash account?

The inability to sell your position in your cash account may be due to utilizing unsettled funds to purchase stocks. Selling stocks before the settlement of funds can result in violations, leading to a 90-day account restriction. During this restricted period, only settled funds can be used to purchase stocks.

15. How do I place a trade on the Light Horse Securities app?

To place a trade on the Light Horse Securities app  the Home tab located at the bottom of the screen. From the Home tab you can select the Buy or Sell buttons to initiate a new trade for a stock you choose. To place a trade from your positions simply click on the position and you will see the Buy and Sell buttons

16. How can I trade stocks with Light Horse Securities? To trade stocks, you will need to open an account with Light Horse Securities and fund your account... Once your account is funded, you can trade  stocks  through the Light Horse Securities app.
Margin
1. What is a Margin Call?

A margin call is a demand from a brokerage firm for an investor to deposit additional funds or securities into their margin account to bring it back to the required level of equity. It typically occurs when the value of securities held in the margin account falls below a certain threshold, known as the maintenance margin requirement.

Here's how it works:

Margin Trading: Margin trading allows investors to borrow funds from their brokerage firm to purchase securities. This borrowing increases the investor's purchasing power, but it also introduces leverage and additional risks.

Margin Requirement: When investors open a margin account, they must maintain a minimum level of equity in the account, known as the margin requirement. This requirement is usually expressed as a percentage of the total value of the securities held in the account.

Maintenance Margin Requirement: The maintenance margin requirement is the minimum level of equity that must be maintained in the margin account after accounting for any losses or fluctuations in the value of the securities. If the equity in the account falls below this level due to market movements, the investor may receive a margin call.

Notification: When a margin call occurs, the brokerage firm will typically notify the investor, either through a phone call, email, or online notification. The notification will specify the amount of additional funds or securities required to bring the account back to the required equity level.

Response: The investor must respond promptly to the margin call by depositing the required funds or securities into their margin account. Failure to do so may result in the brokerage firm liquidating some or all of the investor's positions to cover the shortfall.

Liquidation: If the investor fails to meet the margin call, the brokerage firm may initiate a forced liquidation of the investor's positions to bring the account back into compliance with margin requirements. This could result in significant losses for the investor if securities are sold at unfavorable prices.

Margin calls are an important risk management tool used by brokerage firms to help ensure the financial stability of margin accounts and mitigate the risks associated with margin trading. Investors should be aware of the margin requirements and closely monitor their accounts to avoid receiving margin calls.

2. What are the different types of Margin Calls?

Margin calls typically come in different forms depending on the circumstances of the margin account and the brokerage's policies.

Here are the common types of margin calls:

Maintenance Margin Call: This is the most common type of margin call. It occurs when the account's equity falls below the maintenance margin requirement. The maintenance margin requirement is the minimum amount of equity that must be maintained in the account relative to the value of the securities held. If the equity falls below this level due to market movements or other factors, the brokerage will issue a maintenance margin call, requiring the investor to deposit additional funds or securities to bring the account back to the required level.

Regulatory Margin Call: Regulatory authorities may impose margin requirements on brokerage firms, specifying the minimum amount of equity that must be maintained in customer margin accounts. If a brokerage firm fails to meet these regulatory requirements, it may receive a regulatory margin call from the regulatory authority, requiring it to rectify the shortfall.

Voluntary Margin Call: In some cases, investors may receive a voluntary margin call from their brokerage firm even if their account's equity has not fallen below the maintenance margin requirement. This could occur if the brokerage deems certain positions or market conditions to be too risky and requests additional margin or collateral to mitigate potential losses.

House Margin Call: Some brokerage firms may have their own internal margin requirements that exceed regulatory minimums. If a customer's account falls below the brokerage's house margin requirement, the firm may issue a house margin call, requiring the customer to deposit additional funds or securities to meet the firm's standards.

Intraday Margin Call: Intraday margin calls are specific to day trading accounts. They occur when a day trader exceeds their intraday buying power, which is the amount of capital available for day trading activities. If a day trader exceeds their intraday buying power, the brokerage may issue an intraday margin call, requiring the trader to deposit additional funds or close positions to bring their account back into compliance.

These are some of the common types of margin calls that investors may encounter when trading on margin. It's important for investors to understand the margin requirements and policies of their brokerage firm to avoid margin calls and manage the risks associated with margin trading effectively.

3. What is a Good Faith Violation?    A good faith violation (GFV) occurs in a cash account when an investor sells a security purchased with unsettled funds and then uses the proceeds from that sale to purchase another security before the initial purchase has settled. This violates the Federal Reserve Board's Regulation T, which governs securities transactions and requires investors to pay for purchases with settled funds.

Here's how a good faith violation typically occurs:

An investor purchases securities in a cash account using funds that have not yet settled (i.e., the investor has bought securities using the proceeds from a sale that has not yet settled).The investor sells the securities purchased with unsettled funds before the initial purchase has settled.

The investor then uses the proceeds from the sale to purchase another security before the initial purchase has settled.

When this sequence of transactions occurs, it's considered a good faith violation because the investor has effectively used the proceeds from the sale of securities before the funds from the initial purchase have settled. This violates the regulation that requires investors to pay for purchases with settled funds.

Consequences of a good faith violation may include restrictions on the investor's ability to trade in the account. Brokerage firms are required to monitor and enforce regulations related to good faith violations to ensure compliance with securities laws and regulations.

To avoid good faith violations, investors should ensure that they have sufficient settled funds in their accounts before making additional purchases, especially if they intend to use the proceeds from recent sales to fund new purchases. Additionally, investors can consider upgrading their accounts to margin accounts, which allow for more flexibility in trading with unsettled funds. However, margin accounts also come with their own set of risks and requirements, so investors should carefully consider their options and understand the rules and regulations governing margin trading.

4. What happens if I get a Good Faith Violation?

When a Good Faith Violation occurs, the account will incur a liquidation penalty or strike as a warning for the violation. Each account is permitted up to three violations within a rolling 12-month period. If an account accumulates a fourth violation within a 12-month period, a 90-day trade restriction will be imposed, limiting the account to closing orders only for all new purchases. If a fifth violation occurs within the same 12-month period, the account will be subjected to a 90-day closure.

5. What is a Free Riding Violation?

A free riding violation occurs when an investor purchases securities in a cash account and then sells those securities before fully paying for them with settled funds. This violates Regulation T of the Federal Reserve Board, which mandates that investors must pay for purchases in full before selling them. Essentially, it involves using the proceeds from a sale to cover the cost of a purchase before the original purchase has been paid for, thereby "riding for free" on unsettled funds.

Here's how a free riding violation typically occurs:

An investor purchases securities in a cash account without having sufficient settled funds to cover the purchase.

The investor sells the securities before the initial purchase has been paid for with settled funds.

The investor then uses the proceeds from the sale to cover the cost of the initial purchase.

When this sequence of transactions occurs, it constitutes a free riding violation because the investor is effectively using the proceeds from the sale to cover the cost of the initial purchase before fully paying for it. This violates Regulation T and is considered improper trading behavior.

Consequences of a free riding violation may include restrictions on the investor's ability to trade in the account. Brokerage firms are required to monitor and enforce regulations related to free riding violations to ensure compliance with securities laws and regulations.

To avoid free riding violations, investors should ensure that they have sufficient settled funds in their accounts before making purchases. Additionally, investors can consider upgrading their accounts to margin accounts, which allow for more flexibility in trading with unsettled funds. However, margin accounts also come with their own set of risks and requirements, so investors should carefully consider their options and understand the rules and regulations governing margin trading.
Order Types
1. What is a Market Order?

A market order is a type of order to buy or sell a security at the current market price. When you place a market order, you are instructing your broker to execute the trade immediately at the best available price. Market orders prioritize speed of execution over price, meaning that your order will be filled as soon as possible at the prevailing market price, regardless of whether that price has moved since you placed the order.

Here's how market orders work:

Buy Market Order: If you place a buy market order, your broker will purchase the specified quantity of the security for you at the best available ask price in the market. This means you will pay whatever price sellers are currently asking for the security.

Sell Market Order: If you place a sell market order, your broker will sell the specified quantity of the security for you at the best available bid price in the market. This means you will receive whatever price buyers are currently bidding for the security.

Market orders are typically executed quickly, making them suitable for investors who prioritize speed of execution over price certainty. However, because market orders are executed at the prevailing market price, there is a risk of receiving a less favorable price than expected, especially in highly volatile markets or for securities with wide bid-ask spreads.

It's important to note that the actual execution price of a market order may differ slightly from the quoted price due to factors such as market liquidity, order size, and order routing. Additionally, market orders do not guarantee a specific execution price and may result in price slippage, particularly in fast-moving markets. Therefore, investors should carefully consider the potential risks and benefits of using market orders and ensure they understand the implications of immediate execution at the prevailing market price.

2. What is a Limit Order?

A limit order is a type of order to buy or sell a security at a specified price or better. Unlike a market order, which prioritizes speed of execution over price, a limit order allows you to set a specific price at which you are willing to buy or sell a security. The order will only be executed if the market price reaches or surpasses the specified limit price.

Here's how limit orders work:

Buy Limit Order: If you place a buy limit order, you specify the maximum price you are willing to pay for the security. Your order will only be executed if the market price falls to or below your specified limit price. Once the market price reaches your limit price or lower, your order will be filled at that price or better.

For example: AAPL = 180$, Limit order = 179$ Therefore only when Apple falls until 179$ will your order be filled. Sell Limit Order: If you place a sell limit order, you specify the minimum price you are willing to accept for the security. Your order will only be executed if the market price rises to or exceeds your specified limit price. Once the market price reaches your limit price or higher, your order will be filled at that price or better.

Limit orders provide more control over the execution price compared to market orders, as they allow you to specify the price at which you are willing to trade. However, there is a risk that the limit order may not be executed if the market does not reach your specified limit price.

It's important to note that limit orders do not guarantee execution, as they are dependent on the market reaching the specified limit price. Additionally, limit orders may not be filled immediately, especially if the market price does not reach the specified limit price or if there is insufficient liquidity at that price level.

Despite these limitations, limit orders are commonly used by investors to manage their trade execution and potentially obtain more favorable prices, particularly in volatile or illiquid markets. By setting precise price targets, limit orders can help investors mitigate the risk of unexpected price movements and achieve their desired trade outcomes.

3. What is a Stop Order?

A stop order, also known as a stop-loss order or stop-market order, is a type of order that becomes a market order once a specified price level, known as the stop price, is reached. Stop orders are primarily used as risk management tools to limit potential losses or protect profits on existing positions.

Here's how stop orders work:

Buy Stop Order: If you place a buy stop order, you specify a stop price that is higher than the current market price. Once the market price reaches or surpasses the stop price, your buy stop order becomes a market order, and your broker will execute the trade at the best available price. Buy stop orders are typically used to enter a long position when the market moves in a favorable direction.

Sell Stop Order: If you place a sell stop order, you specify a stop price that is lower than the current market price. Once the market price reaches or falls below the stop price, your sell stop order becomes a market order, and your broker will execute the trade at the best available price. Sell stop orders are commonly used to exit a long position to limit losses or protect profits when the market moves against you.

Stop orders are often used in conjunction with other trading strategies, such as trend following or breakout trading, to automatically trigger trades when certain price levels are breached. They can help investors manage risk by providing a predefined exit point in case the market moves in an unfavorable direction.

It's important to note that stop orders do not guarantee execution at the specified stop price, especially in fast-moving or volatile markets where prices may gap through the stop price. Additionally, once triggered, stop orders become market orders and are subject to execution at the prevailing market price, which may differ from the stop price.

Despite these limitations, stop orders are valuable tools for risk management and can help investors protect their portfolios from significant losses or capitalize on favorable price movements in the market.

4. What is a Stop Limit Order?

A stop-limit order is a type of order that combines elements of both a stop order and a limit order. It is used to buy or sell a security once a specified price level, known as the stop price, is reached, but with the added condition that the trade is executed at a specific limit price or better.

Here's how a stop-limit order works:

Stop Price: The investor specifies a stop price, which is the price at which the stop-limit order becomes active. Once the market price reaches or surpasses the stop price, the stop-limit order is triggered and becomes a limit order.

Limit Price: In addition to the stop price, the investor also sets a limit price, which is the maximum price (for sell stop-limit orders) or the minimum price (for buy stop-limit orders) at which the investor is willing to buy or sell the security.

Activation and Execution: When the market price reaches the stop price, the stop-limit order is activated and becomes a limit order. The order will then be executed at the specified limit price or better, if possible. However, unlike a regular limit order, if the limit price is not reached or the market moves away from the limit price after activation, the order may not be executed.

Risk Management: Stop-limit orders are commonly used for risk management purposes. For example, a buy stop-limit order can be used to enter a long position once the market price surpasses a certain resistance level, while a sell stop-limit order can be used to exit a position to limit losses or protect profits once the market price falls below a support level.

It's important to note that stop-limit orders do not guarantee execution, especially in fast-moving or volatile markets where prices may gap through the stop price. Additionally, if the limit price specified is too aggressive, the order may not be filled, resulting in missed opportunities.

Despite these limitations, stop-limit orders are valuable tools for traders and investors seeking to enter or exit positions at specific price levels while managing the risk of unfavorable price movements.

5. What is a Good-Till-Canceled Order?

A "Good 'til Canceled" (GTC) order is a type of order placed with a brokerage that remains active until it is either executed, canceled by the investor, or reaches the specified expiration date set by the brokerage firm. GTC orders are typically used by investors and traders who want to enter or exit positions at specific price levels but do not want to monitor the market constantly.

Here's how a GTC order works:

Duration: When placing a GTC order, the investor specifies the duration for which the order should remain active. This duration is typically until the order is completed or canceled.

Activation: Once the GTC order is placed, it remains on the brokerage firm's order book until one of the following events occurs: the order is executed, the investor cancels the order, or the specified expiration date is reached.

Execution: If the market reaches the specified price level set in the GTC order, the order is activated and executed. However, if the market does not reach the specified price level during the duration of the order, the order remains on the order book and continues to be active until it is canceled or expires.

Cancellation: Investors have the option to cancel a GTC order at any time before it is executed or reaches its expiration date. This allows investors to modify their trading strategies or adjust their orders in response to changing market conditions.
Miscellaneous
1. What is an IPO?

An IPO, or Initial Public Offering, is the process by which a privately held company offers shares of its stock to the public for the first time, allowing it to become a publicly traded company. In an IPO, the company sells a portion of its ownership, or equity, to investors in exchange for capital.

Here's how the IPO process typically works:

Preparation: Before going public, the company works with investment banks, underwriters, and legal advisors to prepare for the IPO. This involves conducting due diligence, drafting a prospectus outlining key information about the company's business, financials, risks, and use of proceeds, and setting an initial offering price range.

Filing: The company files registration statements with the Securities and Exchange Commission (SEC) to disclose information about the IPO and comply with securities laws and regulations. The SEC reviews the registration statements to ensure they meet disclosure requirements.

Roadshow: The company and its underwriters conduct a roadshow, during which they meet with potential investors to present the investment opportunity and gauge interest in the IPO. The roadshow helps determine investor demand and set the final offering price.

Pricing: Based on feedback from the roadshow and market conditions, the underwriters determine the final offering price for the shares. The offering price is typically set at a level that balances investor demand with the company's fundraising objectives.

Allocation: Once the offering price is set, the underwriters allocate shares to institutional investors, retail investors, and other interested parties who participated in the IPO. Allocation decisions are based on factors such as investor demand, size of orders, and relationship with the underwriters.

Trading: The shares are listed on a stock exchange, such as the New York Stock Exchange (NYSE) or Nasdaq, and begin trading publicly under a ticker symbol. On the day of the IPO, investors who were allocated shares can buy and sell them on the open market.

Post-IPO: After the IPO, the company becomes subject to public reporting requirements and must file periodic financial reports with the SEC. Its stock price is determined by supply and demand in the secondary market, and it may fluctuate based on factors such as company performance, market conditions, and investor sentiment.

IPOs provide companies with access to public capital markets, allowing them to raise funds for growth, expansion, acquisitions, debt repayment, or other corporate purposes. They also offer investors the opportunity to invest in early-stage companies and potentially profit from their growth and success. However, investing in IPOs carries risks, including volatility, uncertainty, and the possibility of loss. Investors should carefully evaluate the company's prospects, financials, and risks before participating in an IPO.

2. What is Margin Trading?

Margin trading is a method of trading securities using borrowed funds provided by a brokerage firm. It allows investors to leverage their investment capital to potentially increase returns, but it also amplifies the risks associated with trading.

Here's how margin trading typically works:

Opening a Margin Account: To engage in margin trading, an investor must open a margin account with a brokerage firm. This account allows the investor to borrow funds from the broker to buy securities.

Margin Requirements: When investors open a margin account, they must maintain a minimum level of equity in the account, known as the margin requirement. This requirement is typically expressed as a percentage of the total value of the securities held in the account.

Leverage: Margin trading allows investors to leverage their investments by borrowing funds from the broker. For example, if an investor deposits $5,000 into a margin account with a 50% margin requirement, they can purchase up to $10,000 worth of securities, with the remaining $5,000 being borrowed from the broker.

Buying Securities on Margin: With a margin account, investors can buy securities using both their own funds and borrowed funds from the broker. This increases the purchasing power of the investor and allows them to potentially increase their returns if the value of the securities rises.

Interest Charges: Borrowed funds in a margin account are subject to interest charges, which the investor must pay to the broker. These interest charges accrue on the borrowed amount and are typically calculated on a daily basis.

Margin Calls: Margin trading involves risks, including the risk of margin calls. If the value of the securities in the margin account falls below the minimum margin requirement, the broker may issue a margin call, requiring the investor to deposit additional funds or securities into the account to bring it back into compliance. Failure to meet a margin call may result in the broker liquidating some or all of the investor's positions to cover the shortfall.

Short Selling: Margin accounts also allow investors to engage in short selling, which involves selling securities that the investor does not own with the expectation that the price will decline. Short selling requires borrowing the securities from the broker and selling them in the market. If the price of the securities falls, the investor can buy them back at a lower price, return them to the broker, and profit from the price difference.

Margin trading can amplify both gains and losses, making it a high-risk strategy that is suitable for experienced investors who understand the risks involved. It's important for investors to carefully manage their margin positions, monitor market conditions, and be prepared to meet margin calls if necessary.

3. What is Day Trading ?Day trading is a style of trading where traders buy and sell financial instruments, such as stocks, options, currencies, or futures contracts, within the same trading day. Day traders aim to profit from short-term price movements in the market, typically holding positions for only a few minutes, hours, or seconds.

Here are some key characteristics of day trading:

Short-Term Trading: Day traders focus on short-term price movements and seek to capitalize on intraday volatility. They do not hold positions overnight, as they aim to close all of their trades by the end of the trading day to avoid overnight exposure to market risks.

High Frequency: Day traders often execute a large number of trades throughout the day, taking advantage of small price fluctuations in the market. They may use technical analysis, chart patterns, and trading indicators to identify short-term trading opportunities and make quick decisions.

Leverage: Day traders commonly use leverage, or borrowed capital, to amplify their trading positions and potentially increase returns. Margin accounts allow traders to control larger positions with a smaller amount of capital, but leverage also increases the risk of significant losses.

Risk Management: Risk management is crucial for day traders, as intraday price movements can be unpredictable and volatile. Day traders often set strict stop-loss orders to limit potential losses on each trade and use position sizing techniques to manage risk exposure.

Market Access: Day traders require access to real-time market data, fast execution platforms, and direct market access (DMA) to execute trades quickly and efficiently. They may use specialized trading software or online trading platforms with advanced charting tools and order entry functionalities.

Pattern Day Trading Rule: In the United States, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) enforce the Pattern Day Trading Rule, which requires day traders to maintain a minimum account equity of $25,000 in a margin account. This rule applies to accounts that execute four or more day trades within a five-business-day period.

Day trading offers the potential for significant profits, but it also involves high levels of risk and requires discipline, skill, and experience to be successful. Traders should be aware of the risks associated with day trading, including the potential for substantial losses, and carefully consider their trading strategies, risk tolerance, and financial goals before engaging in day trading activities. Additionally, traders should stay informed about market news and developments and continuously refine their trading techniques to adapt to changing market conditions.

4. How are Day Trades calculated?

Day trades are calculated based on the number of trades opened and closed within a single trading day. In the context of the U.S. financial markets, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) define a day trade as the opening and closing of the same security (e.g., stock or option contract) on the same trading day.

Here's how day trades are typically calculated:

Buy and Sell: A day trade occurs when an investor buys and then sells the same security, or sells short and then buys to cover, within the same trading day.

Minimum Requirement: To be considered a pattern day trader under SEC and FINRA rules, an investor must execute four or more day trades within a rolling five-business-day period in a margin account.

Pattern Day Trader: Once an investor meets the pattern day trading criteria, they are classified as a pattern day trader (PDT). PDTs are subject to certain regulatory requirements, including the requirement to maintain a minimum account equity of $25,000 in a margin account.

Exceeding the Limit: If a PDT exceeds the allowable number of day trades within a rolling five-business-day period without maintaining the minimum equity requirement, they may face restrictions on trading or be required to deposit additional funds to meet the minimum equity requirement.

Resetting the Count: The count of day trades resets each time a PDT remains below the threshold of four day trades within a rolling five-business-day period or if the account equity exceeds $25,000.Different Securities: It's important to note that the day trade count applies separately to each security traded. For example, executing four day trades in one stock and four day trades in another stock within the same rolling five-business-day period would still classify the investor as a pattern day trader.

It's essential for traders to understand the rules and regulations governing day trading, including the pattern day trading rules enforced by regulatory authorities. Failure to comply with these rules can result in penalties, restrictions on trading, or account closures. Additionally, traders should carefully manage their day trading activities and consider the risks associated with frequent trading, including commissions, fees, and potential losses..

5. What are Day Trading Rules?

Day trading rules are regulations established by regulatory authorities, such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), that govern the activities of day traders. These rules are designed to protect investors and maintain the integrity of the financial markets. Here are some key day trading rules commonly enforced in the United States:

Pattern Day Trading Rule: The Pattern Day Trading (PDT) rule is a regulation enforced by FINRA that applies to margin accounts. According to this rule, an investor is classified as a pattern day trader if they execute four or more day trades within a rolling five-business-day period. Light Horse Securities limits 3 day trades within a rolling five-business day period. Once classified as a pattern day trader, the investor is subject to additional regulatory requirements, including maintaining a minimum account equity of $25,000 in a margin account.

Minimum Equity Requirement: Pattern day traders are required to maintain a minimum account equity of $25,000 in a margin account to continue day trading. This equity must be maintained at all times, and if the account falls below this threshold, the investor may face restrictions on trading.

Day Trade Buying Power: Day traders are granted day trade buying power, which allows them to trade with leverage in their margin accounts. The amount of day trade buying power available to an investor is determined by their account equity and margin requirements.

Margin Requirements: Day traders must adhere to margin requirements set by their brokerage firm and regulatory authorities. Margin requirements dictate the amount of capital that must be deposited in the account to enter into leveraged positions.

Pattern Day Trader Disclosure: Brokerage firms are required to provide pattern day traders with a disclosure document outlining the risks and requirements associated with pattern day trading. This document informs investors about the potential risks of day trading, including the risks of leverage, volatility, and loss of capital.

Day Trade Execution Rules: Day trades must be executed in accordance with regulatory guidelines, including rules related to order execution, settlement, and reporting. Traders must comply with these rules to ensure fair and orderly trading in the market.

Short Sale Rules: Day traders engaging in short selling must adhere to regulations governing short sales, including the uptick rule and the short sale circuit breaker rule, which are designed to prevent abusive short selling practices and maintain market stability.

It's important for day traders to understand and comply with these rules to avoid penalties, restrictions on trading, or account closures. Additionally, traders should carefully manage their day trading activities, monitor their account equity, and consider the risks associated with day trading before engaging in this style of trading.

6. Is my account SIPC insured?

All accounts are safeguarded by SIPC. As a member of SIPC, Light Horse Securities extends SIPC protection to our customers. This coverage offers total protection of up to $500,000 for cash and securities, with a limit of $250,000 for cash.

7. What is Short Selling?

Short selling, also known as shorting or going short, is a trading strategy used by investors to profit from a decline in the price of a security. In short selling, an investor borrows shares of a stock from a broker and sells them on the open market with the intention of buying them back at a lower price in the future. The investor then returns the borrowed shares to the broker, pocketing the difference between the selling price and the repurchase price as profit.

Here's how short selling works:

Borrowing Shares: The investor borrows shares of a stock from their broker, typically through a margin account. The broker lends the shares to the investor, who is required to pay interest on the borrowed shares and may also be required to deposit collateral or maintain a minimum account balance.

Selling Shares: After borrowing the shares, the investor sells them on the open market at the current market price. By selling the shares short, the investor effectively takes a bearish position on the stock, betting that its price will decline.

Waiting for Price Decline: The investor waits for the price of the stock to decline. If the price falls as anticipated, the investor can buy back the shares at the lower price, known as covering the short position.

Buying Back Shares: To cover the short position, the investor buys back the same number of shares that were originally borrowed and sold short. The investor purchases the shares at the lower price and returns them to the broker.

Returning Borrowed Shares: The investor returns the borrowed shares to the broker, completing the short sale transaction. The difference between the selling price and the repurchase price, minus any borrowing costs or fees, represents the investor's profit or loss from the short sale.

Short selling can be a risky strategy because it involves selling securities that the investor does not own, creating unlimited potential losses if the price of the stock rises significantly instead of falling as anticipated. Additionally, short selling carries the risk of short squeezes, where a sharp increase in the stock price forces short sellers to buy back shares at higher prices to cover their positions, leading to further upward pressure on the stock price.

8. What is an ACAT?

An ACAT, or Automated Customer Account Transfer Service, is a system used by brokerage firms to facilitate the transfer of securities and assets between different financial institutions on behalf of investors. ACAT enables investors to transfer their entire account or specific assets from one brokerage firm to another in a streamlined and automated manner.

9. What are Trading Activity Fees?

Trading activity fees, also known as transaction fees or exchange fees, are charges imposed by FINRA to brokerage firms or exchanges for executing trades in financial markets. These fees are separate from commissions or spreads and are typically based on the volume or value of securities traded. Current rate is $0.000166/per share sold with a maximum of $8.30 per trade.

10. What are SEC Fees?

The SEC fee, or Securities and Exchange Commission fee, is a regulatory fee imposed by the U.S. Securities and Exchange Commission (SEC) on securities transactions. The purpose of the SEC fee is to fund the SEC's oversight and enforcement activities, including market surveillance, investor protection, and regulatory enforcement.

The SEC fee is assessed on most securities transactions, including stock trades, options trades, and certain other securities transactions. The fee is typically calculated as a small percentage of the total dollar value of the securities sold, with a maximum fee cap per trade.

As of my last update, the SEC fee rate for most securities transactions is $8 per million dollars of sale proceeds, which equates to approximately 0.000008% of the total dollar value of the transaction.

It's important to note that the SEC fee is collected by brokerage firms on behalf of the SEC and is passed on to investors as part of the overall transaction cost. The fee is typically included in the total commission or transaction fee charged by the brokerage firm for executing trades.

11. Does Light Horse Securities take physical certificates for deposit?

No, Light Horse Securities does not accept physical stock certificates for deposit.

12. Can I get a physical stock certificate issued for the securities in my account?

No, Light Horse Securities does not process physical stock certificates in any form.

13. What is my dividend tax rate?

The dividend tax rate is determined by an investor's tax bracket and dividend type. For in depth and up-to-date information, please refer to: https://www.irs.gov/taxtopics/tc404

14. What transaction fees do you charge?

Transaction fees are charged by SEC and FINRA when you sell securities. Currently the fees are $0.000008 * the principal amount sold for SEC fee and $0.000116 per share sold with a $8.30 max for Finra fees.

15. What are Light Horse Securities customer information privacy policies?

AInvest will not disclose your personal information voluntarily, and all your information and asset information are encrypted.

16. What quotes are currently available?

Currently AInvest only offers Nasdaq Basic which offers real time Quotes with best bid and offer plus last sale data.

17. What are the steps to update my address with Light Horse Securities?

Send an email to support@ainvestbrokers.com and include the following information:

Your account number (You can find your account number by navigating to Me -> Account & Security -> Securities account)The new address you would like to have on file.

Provide one of the following documents verifying your name and new address:

a. Utility bill or cable bill

b. Bank statementc. Lease agreement

19. How can I view my crypto statements, confirms, and tax forms?

To access your account documents, including crypto statements, confirms, and tax forms, follow these steps:

Open the Light Horse Securities app.

Tap on your customer profile located in the top left corner of the app.

Navigate to Settings > Account & Security > Documents.

20. How to find a paper trading/stock simulator?

You can find paper trading by heading to the top left corner of the home page.

21. How to trade in paper trading/stock simulator?

In our paper trading/stock simulator, you can experience trading just as you would in the real market. Within your training account, simply input the stock name, price, and quantity to buy or sell stock. While we currently do not offer a reset option for the paper trading/stock simulator, you have the option to initiate or participate in a paper trading contest to begin trading alongside others

21. how to modify the personal information (mobile phone/email)?

You can go to "Setting" by clicking on your profile photo in the upper left corner and then change your personal information in "Account & Security".
Crypto
1. How to buy crypto?

Head over to Markets tab. Within markets tab you have the option to trade stocks, ETFs or Crypto. Select or search for the crypto you desire and similar to how you purchase a stock, you can trade with crypto.

2. How to paper trade cryptocurrency?

Within your paper trading platform, select “Trade now” and search for the crypto you’re interested in. Perform a trade just like how you would trade stocks.
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