Integrated Feed Handler Switch for Financial Data Latency
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Solution Overview
Problem
Financial market data networks experience high network latency due to the need for separate feed handlers to process market data feeds, leading to increased costs and complexity, and existing solutions do not adequately reduce latency for high-frequency trading strategies.
Innovation Solution
Implementing feed handler functionality within or before the initial switch in the communication data path from the financial exchange to the downstream consumer, allowing raw market data to be processed and normalized before entering the switching fabric, thereby reducing latency and eliminating the need for separate feed handlers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of manufacture
If separate feed handlers are used to process market data feeds, then data normalization and processing can be performed, but network latency increases and system complexity increases
Solution Approach 1:
The patent combines the feed handler functionality directly into the network switch by integrating a feed handler module within the switch's data path. This allows market data feeds to be normalized and processed inline as they pass through the switch, eliminating the need for separate feed handler devices and reducing network latency while maintaining data processing capabilities
Solution Approach 2:
The network switch acts as an intermediary device that performs feed handling functions. By placing the feed handler module within the switch, the system uses the switch as a mediator to normalize and process market data feeds before they reach downstream consumers, thereby reducing latency compared to external feed handlers
2Speed
If separate feed handlers are deployed near exchanges, then data processing occurs closer to source, but physical space becomes limited and costs increase
Solution Approach 1:
The patent merges the feed handler module with the network switch into a single integrated device. This consolidation maintains the benefit of processing data close to the exchange while reducing system complexity by eliminating separate feed handler hardware and simplifying the overall system architecture
Solution Approach 2:
The network switch is enhanced with multi-functionality by integrating feed handling capabilities alongside its standard switching functions. This allows a single device to perform both data switching and market data normalization/processing, reducing the need for multiple specialized devices and simplifying system deployment
Data Source
AI summary
A financial market data network having a lowered overall latency includes communication interfaces, specialized switches having internal switching fabric, and feed handlers that all facilitate communications between financial exchanges and consumers of financial market data therefrom. A feed handler is situated within or proximate a specialized switch and is arranged to receive raw financial market data directly from financial exchanges without the data first traveling through any switching fabric. The feed handler is adapted to process the received raw financial market data into a normalized format before the normalized financial market data is ever routed through any switching fabric, prior to being sent to consumers. The communication interfaces can include I/O ports located on the specialized switches, and the feed handlers can include one or more computer processors or servers. Additional internal switch components can include packet processors and storage components that store network protocols and/or layer tables.