Distributed Server Side Device Architecture for Electronic Trading
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Solution Overview
Problem
Electronic trading systems face challenges in efficiently managing trading strategies with multiple quoting legs across different exchange systems, leading to delays and increased risk of being legged or double-filled due to the need for a single server side device to handle orders across multiple exchanges.
Innovation Solution
A trading strategy device splits trading strategy orders into multiple child orders with fewer quoting legs, which are intelligently routed to server side devices located nearest to the respective exchange systems, allowing for simultaneous processing and reducing latency and the risk of being legged or double-filled.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If a single server side device handles orders across multiple exchanges, then device complexity is reduced, but latency increases and reliability decreases due to the need to manage multiple exchange systems
Solution Approach 1:
The patent divides the single server side device into multiple server side devices, each responsible for handling orders for specific exchange systems. This segmentation allows parallel processing of orders across different exchanges, reducing latency while maintaining manageable complexity through specialized device functions
2Device complexity
If a single server side device handles orders across multiple exchanges, then device complexity is reduced, but reliability decreases due to increased risk of being legged or double-filled
Solution Approach 1:
By segmenting the server side devices so that each device handles orders for a specific exchange system, the patent eliminates the risk of being legged or double-filled across different exchanges. Each device can independently and reliably manage its assigned exchange system without interference from other exchange operations
Solution Approach 2:
The patent assigns specific exchange systems to specific server side devices, creating localized expertise and responsibility. Each device is optimized for its assigned exchange system, improving reliability through specialized handling while maintaining overall system coordination
3Device complexity
If trading strategy orders with multiple quoting legs are processed sequentially, then device complexity is reduced, but productivity decreases due to delays in order execution
Solution Approach 1:
The patent segments the processing of trading strategy orders by creating multiple server side devices that can simultaneously handle different legs of a trading strategy. This allows parallel execution of multiple quoting legs, dramatically improving productivity while keeping each individual device's processing logic relatively simple
Solution Approach 2:
The patent transitions from sequential single-dimensional processing to parallel multi-dimensional processing by distributing order legs across multiple server side devices. This dimensional change from time-sequential to space-parallel processing enables simultaneous execution of multiple order components
Data Source
AI summary
An electronic trading method is provided. The method includes receiving a trading strategy order having a parent trading strategy including multiple quoting legs; splitting the trading strategy order into multiple child orders; and submitting each of the multiple child orders to exchange systems adapted to fill the quoting legs in the child orders. Each child order includes a child trading strategy having a single quoting leg or a reduced number of quoting legs relative to the parent trading strategy. The child trading strategies are the same as the parent trading strategy except for the number of legs marked as quoting legs. The method may be performed by a trading strategy device disposed between a client device and multiple server side devices.