Switch-Based Financial Trading System Latency Reduction
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Solution Overview
Problem
Current securities trading systems experience increased latency when processing a large volume of order messages, which is exacerbated by the interaction between GW servers and trading servers, leading to higher operational costs as enhancements are needed to mitigate these latencies.
Innovation Solution
A financial products trading system that eliminates the need for a GW server and order management servers by using a switch with a server management table to route order messages directly to trading servers, performing error checks and execution processes, thereby reducing latency and operational costs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a GW server and order management servers are used to process order messages, then the system can perform format checks, logical checks, routing, and execution processes, but the latency increases due to multiple servers and network hops
Solution Approach 1:
The patent merges the GW server and order management server functions into a single integrated server. This server simultaneously performs format checking, logical checking, routing based on issue information, and execution processes, eliminating the need for multiple separate servers and reducing network hops between them.
Solution Approach 2:
The patent segments the processing functions into distinct modules within the integrated server: a message receiving unit for format checks, a routing unit for determining destination servers based on issue information, and an execution unit for processing orders. This modular segmentation maintains functional reliability while consolidating infrastructure.
2Speed
If the functions of apparatuses or network are enhanced to avoid latencies, then the processing speed improves, but the running cost increases significantly
Solution Approach 1:
By consolidating multiple server functions into a single integrated server, the system achieves high-speed processing through reduced network hops and simplified architecture, while simultaneously lowering operational costs by reducing the number of physical servers, network interfaces, and maintenance requirements.
Solution Approach 2:
The integrated server is designed with multi-functionality, performing format validation, logical validation, routing decisions, and execution processes within a single platform. This universal server handles diverse order message types and routing scenarios without requiring specialized hardware for each function, optimizing both speed and cost efficiency.
3Productivity
If multiple servers are used to handle high-frequency order messages, then the processing capacity increases, but the number of network hops and latency increases
Solution Approach 1:
The patent consolidates the message receiving unit, routing unit, and execution unit into a single server infrastructure, eliminating network transmission delays between separate servers. The integrated architecture processes high-frequency order messages internally without external network hops, maintaining high productivity while minimizing transmission time.
Data Source
AI summary
A securities trading system 10 which is an example of an financial products trading system includes: a switch 100 including a processor 104 which checks order issue information included in each of order messages received from a participant terminal 300 against a server management table 125, determines the address of a trading server 200 to which the order message is to be sorted, delivers the order message, receives a notification of a result of a predetermined process for the delivered order message from the trading server 200, and sends the notification to the participant terminal 300; and the trading server 200 including a processor 204 which performs a predetermined error check on each of the delivered order messages, sends the switch 100 an error notification or an order reception notification depending on a result of the error check, performs an execution process for each of the order messages whose result of the error check is normal, and sends the switch 100 an execution notification depending on the execution process.