Trading Network Optimization for Low-Latency Order Synchronization
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Solution Overview
Problem
High network latency and congestion in trading systems cause asynchronous conditions and missed microsecond trading opportunities, leading to increased costs and inefficient network performance.
Innovation Solution
An apparatus and method utilizing a network optimizer to manage order state synchronization and minimize network traffic by prioritizing trading instructions based on strategy, reducing redundant messages, and maintaining order state synchronicity across execution venues.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If network traffic is increased to handle more trading instructions, then trading strategy implementation is improved, but network latency increases causing missed microsecond opportunities
Solution Approach 1:
The system pre-synchronizes order state information between the trading system and execution venues before trading instructions are sent. This preliminary synchronization ensures that when trading instructions are transmitted, the order state is already aligned, eliminating the need for repeated synchronization messages and reducing network latency during critical trading operations
Solution Approach 2:
The patent extracts and separates the order state synchronization function from the trading instruction transmission function. By independently managing order state synchronization, the system can optimize each function separately, allowing trading instructions to be sent without being delayed by synchronization overhead
2Speed
If network traffic is reduced to minimize latency, then network performance is improved, but order state synchronization becomes asynchronous causing missed trades
Solution Approach 1:
The system performs order state synchronization in advance, before trading instructions are transmitted. This preliminary action ensures that the order state is already synchronized when trading occurs, eliminating the need for frequent synchronization checks during high-speed trading operations
Solution Approach 2:
The system implements a feedback mechanism where the trading system monitors and tracks order state information from execution venues. This feedback loop ensures that any asynchronous conditions are detected and corrected, maintaining synchronization reliability even with reduced network traffic
3Productivity
If all trading instructions are forwarded to execution venues, then trading opportunities are captured, but redundant messages increase network congestion
Solution Approach 1:
The system applies partial action by selectively forwarding only necessary trading instructions to execution venues. By comparing the current order state with the desired state, the system determines which instructions are actually needed, avoiding redundant transmissions while ensuring all necessary trading opportunities are captured
Solution Approach 2:
The patent extracts redundant trading instructions from the transmission queue by comparing current order state with requested state. This extraction process identifies and removes duplicate or unnecessary messages before they are sent to execution venues, reducing network traffic while maintaining complete trading coverage
Data Source
AI summary
Disclosed herein are an apparatus, non-transitory computer readable medium, and method for minimizing network traffic and maintaining synchronous state information between systems.