The stock markets got a real shot in the arm yesterday, and any investor who’s using spread bets or contracts for difference should be quickly working out whether its got legs.

The first thing that’s suspicious is that it is celebrating a fall in the jobs data in the US. To be fair this is not as bad as everyone was expecting and it has a nice bright spot with manufacturing, but still it’s not what you would expect. Another thing that set the market tearing was the Chinese announcing that their economy was doing just fine. Now there is no reason why an ex-communist one party state would lie about its economic figures so we are sure that all the fund managers who are taking their key from the Chinese Communist Party and their record of every so accurate statistics is just completely rational.

To be honest the market seems to be going through what could be called “animal spirits”. The fund managers are back in their office and they have taken over from the juniors, who in most cases are overly cautious – buying in a bull market (like last year) but otherwise overly cautious.

Although it is likely that the current government, and most governments outside America, are going to rely on the private sector to grow – and so are likely to get out of the way, there is still a lot of money that is going to be taken out of the economy as taxes rise and benefits fall. There is usually the silver lining that it will mean that private enterprise does not get crowded out, but at 0.5% current interest rates that’s not really as big an issue as it would have been in previous tighter economies.

Does this mean that the market is going to resume its downward trend? We don’t have a clue.

Betfair has revolutionised sports betting. Instead of being the bookmaker, or market maker, it made a transparent market for betting on sports such as horse racing and football. It already operates tradefair for spread betting, although this has not rocked the market.

So now Goldman Sachs is coming in. Goldman Sachs revolutionises everything it touches. It was Goldman Sachs that revolutionised the financial markets by essentially transforming itself into a day trading operation. Goldman Sachs helped to revolutionise mortgages by creating the securitised lending markets. Goldman Sachs should never be ignored.

Goldman Sachs and Betfair have announced that they want to set up an exchange for Contracts For Difference, called LMAX. The website is saying nothing yet, although the LinkedIn page for tradefair now says “LMAX (Formerly Tradefair)”, so it looks like spread betting is either going to be abandoned or incorporated into this. Goldman Sachs have bought a 12.5% stake.

Will this revolutionise CFD trading? Unlike sports betting there is an element of time that is needed, and so the need for a more active market maker may be necessary.

One interesting side to this all is that they are aiming at professionals, as they are setting up a City of London based management team for LMAX. To our eyes this does not seem to be playing to Betfair’s strength, which is their 2 million customer base. But they’re millionaires and we’re not, so they’ve got every right to try.

Betfair certainly have created a phenomenal betting exchange, and Goldman Sachs is not a charity. This could certainly shake things up. At least in the way that Tradefair never managed.

The CFD trading arm of the IG Group, IG Markets, is celebrating saving its Australian clients in excess of $1mil per month, thanks to the deployment of its proprietary Price Improvement initiative, which ensures instant, real-time quoting and guards against immediate price fluctuations in volatile markets.
The Price Improvement technology works by giving an instant quote and freezing that rate while the transaction is executed, allowing traders to take advantage of any price movements in their favour over the duration of executing their order. This rounds the all too common complaint of requotes, and prices jumping between the instruction and the execution, often to the detriment of the traders well researched and reasoned position.
This is a positive step for IG Markets and traders alike, and indeed is a promising move for the industry as a whole. In providing traders that guarantee of execution at the price quoted on instruction, the guard against unexpected jumps in either direction gives a healthy dose of much needed certainty, particularly during these times of significant market volatility.
Knowing that your broker is working with, rather than against you in times of considerable market flux is one very good reason to trade with a particular brokerage outfit, and it is very much the exception rather than the rule for traders to be able to take advantage of favourable market ticks over the course of execution. When considered in the context of the Investment Trends report naming IG Markets as the highest satisfaction broker, this looks like yet another reinforcement of positive policy from IG Markets.

After years of extensive research and development in its new spread betting and CFD platform, CMC Markets has launched its new trading portal, designed to approach spread betting from a whole new angle. Of course, we’ve heard this kind of rhetoric before from brokers, particularly those that are web-based. So what’s revolutionary about the CMC Markets setup, and is it likely to have a positive effect for traders?
CMC Markets boldly claim to have ‘reinvented’ spread betting, as a result of its new proprietary system which has been 3 years and multiple millions in the making. On first glance, the platform looks space-agey, and the interface is far more attractive than your standard spread betting portal. But when you take things a little deeper, the real power of the system begins to shine through.

A ‘Library’ function with instant, real-time access to the world markets allows you to find out what’s going on around the world markets quoting automatic, live prices, and you can effect trading decisions directly off chart while making use of the many drag and drop functionalities built in to the system. Every product comes with its own comprehensive facts sheet so you’re completely in the know about how it works, a brief history and the context in which your investment will sit. It’s all about improving the trading experience, and no doubt within a matter of seconds you’ll agree it fulfils this brief.

Customizable, drag and drop watchlists make it easy to keep track of your portfolio. Orders are easily executed through an easy to understand trading pane, and your real-time results are displayed in front of you once you confirm the order.

This might all sound like something of a sales pitch, but the stylish appearance and enhanced functionality of the CMC Markets platform make it a serious player, and a serious contender for experienced traders looking for a more user-friendly platform.

The man behind the magic, Peter Cruddas, was responsible for giving birth to the world’s first ever online forex platform in the mid-90s, and if our experiences of the new CMC Markets platform are anything to go by, he could well have another runaway success on his hands.

Investment giant Goldman Sachs has landed itself an equity stake in Betfair’s new stock exchange, in a private deal thought to concern a 12.5% holding in the business. The LMAX exchange provides traders with an exchange for the trade of a number of different asset classes, most importantly contracts for difference, which will shake up exchange traded CFDs and provide a regulated, market-controlled environment for the trading of CFDs and other derivatives and equities.

The move comes ahead of an anticipated IPO, which is believed to be in the preparatory stages at present as Betfair irons out the details ahead of its launch later this year. Having only gained the green-light from the FSA in August 2010, LMAX will focus on allowing traders access to trading a variety of instruments online, and it is hoped that with an impressive staff roster and a considerable launch in the works, LMAX could help tap in deeper to a consumer market and open avenues to new traders in addition to scalping more experienced traders who are looking to exchange-trade.

A direct competitor to the London Stock Exchange, LMAX is the latest in a long line of competing exchanges setting up in the City to help tempt traders away from more traditional means of investment, with names such as NYSE Euronext, BATS and Chi-X all joining the party to largely strong success. It remains to be seen whether the Betfair/Goldman Sachs venture will deliver on its promise, and provide traders with the derivatives based exchange the parent companies believe the market desperately needs.