LMAX takes a punt with online trading platform

An online trading platform for private punters to shake-up the industry for betting on financial markets goes live today.

LMAX — which stands for London Multi-Asset Exchange — hopes to replicate the success of parent company Betfair by using a similar idea.

Customers will trade against each other using LMAX technology — the company itself will merely act as the middleman, making a commission on trades but not taking a position itself.

LMAX is 73.5% owned by Betfair, which successfully joined the stockmarket last week. The rest is owned by Goldman Sachs (12.5%) and management (14%).

Chief executive Robin Osmond reckons both high net worth individuals and smaller institutions will be keen to sign up.

At the moment customers who pass the "appropriateness" test can trade contracts for difference in market indices, bonds, commodities and foreign exchange. A wider range of asset classes will be added later.

Betfair has revolutionised the sports-betting market since it emerged in 2000 by allowing customers to place bets at odds offered by other traders, bypassing the traditional bookie.

A statement from LMAX today said: "LMAX aims to replicate Betfair's disruptive effect on the sports betting market."

The spread-betting industry will watch the newcomer's progress closely, say analysts.