Distributed Trading Bus Architecture for Scalable Order Processing

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Centralized trading systems in futures and options markets are inflexible, expensive, and struggle to scale with increasing transaction volumes, leading to inefficiencies and high maintenance costs, while lacking the ability to communicate effectively with external systems and adapt to new technologies.

Innovation Solution

A distributed trading system architecture utilizing a messaging bus to decouple components, allowing for independent operation and communication between validator, risk allocation value, match engine, and persist components, enabling scalable and flexible transaction processing and data management.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Device complexity

If centralized trading systems are used, then transaction processing can be simplified, but scalability and adaptability deteriorate as transaction volumes increase

Engineering Contradiction:

Improvesystem architecture complexityVSAvoidscalability and adaptability

Core Design Contradiction:

Device complexityVSAdaptability or versatility

Solution Approach 1:

The patent divides the centralized trading system into multiple independent distributed components including order management system, trading engine, clearing system, and settlement system. Each component operates autonomously and communicates through standardized interfaces, enabling independent scaling and adaptation without affecting the entire system.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent transitions from a single-dimensional centralized architecture to a multi-dimensional distributed architecture across multiple servers, networks, and processing layers. This dimensional expansion allows the system to handle increased transaction volumes by adding resources in different dimensions rather than scaling a single centralized system.

Inventive Principle:

Principle #17Another dimension (Dimensionality change)

2Ease of manufacture

If centralized trading systems are used, then initial implementation is easier, but maintenance costs and inflexibility increase over time

Engineering Contradiction:

Improveinitial implementation easeVSAvoidmaintenance cost and flexibility

Core Design Contradiction:

Ease of manufactureVSEase of repair

Solution Approach 1:

The system is segmented into modular components that can be independently maintained, updated, and repaired. This modular architecture reduces maintenance costs by allowing targeted fixes without system-wide changes and improves flexibility through independent component evolution.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The distributed components are designed with universal interfaces and standardized protocols that enable multiple functions across different system elements. This universality reduces maintenance complexity by allowing consistent maintenance procedures across diverse components while maintaining flexibility.

Inventive Principle:

Principle #6Universality (Multi-functionality)

3Device complexity

If centralized systems process high transaction volumes, then coordination is simpler, but system performance and efficiency deteriorate

Engineering Contradiction:

Improvecoordination complexityVSAvoidtransaction processing efficiency

Core Design Contradiction:

Device complexityVSProductivity

Solution Approach 1:

By segmenting the trading system into specialized distributed components, each component can process specific transaction types in parallel. This segmentation reduces coordination overhead while dramatically improving throughput by eliminating the single-point bottleneck of centralized processing.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent introduces message queues and standardized communication protocols as intermediaries between distributed components. These intermediaries enable efficient asynchronous communication and coordination without requiring complex direct synchronization between all system elements, maintaining simplicity while scaling performance.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS7890412B2Distributed trading bus architecture

Publication Date: 2011.02.15 NEW YORK MERCANTILE EXCHANGE

AI summary

A distributed trading system for handling a plurality of order requests, each order request comprising parameters under which a participant will buy and/or sell a futures contract. A validator component is coupled to a messaging bus and has a first interface for receiving order request and an interface generating a validated order message on the messaging bus related to validated orders, wherein the validator implements processes for validating the order requests. A risk allocation value (RAV) component is coupled to the messaging bus and has an interface for receiving validated order messages from the validator, wherein the RAV component implements processes for evaluating risk associated with an order should that order be completed. A match engine is coupled to the messaging bus and has an interface for receiving validated order messages from the RAV component, wherein the match engine implements processes for matching orders based on the order-specified criteria. A persist component is coupled to the messaging bus and has an interface for receiving messages related to orders and trades, wherein the persist component implements processes for persistently storing information related to orders and trades.