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.