Trading systems have long exploited new technologies to give market participants advantages in understanding, strategy, and timing to improve outcomes. The increasing exploitation of latency reductions for market advantage has made co-location with major venues critical — leading market participants to make increasing capital expenses for on-premise and co-lo infrastructure.

For much of IT, the major trend in the second decade of the century is the move to leverage major cloud service providers to provide flexibility, innovation, and capital efficiency in providing services. Regulatory, control, and latency requirements for trading systems have made them one of the last application areas to move to the cloud. OpStack believes that with thoughtful architecture it can be remarkably effective to build and operate trading systems using a hybrid cloud approach.

In consultation with the lead architect at a financial services firm, OpStack developed this reference infrastructure to allow leveraging public cloud services to substantially reduce the capital investment needed to enter a new market without sacrificing any competitive advantage to other participants fully co-located with the electronic trading venues. In this architecture, the presumption was to use cloud neutral technologies (Docker, Kubernetes, et al) with the possibility of replacing some of the less latency sensitive elements with PaaS elements — we envisioned the trade history databases leveraging a cloud DBaaS (Database as a Service) offering rather than building and maintaining dedicated clusters from scratch on cloud IaaS (Infrastructure as a Service).

OpStack uses discussion documents, like this one, as a means of creating conversations with partners that lead to business-specific solutions. We specified this candidate architecture in a fair amount of detail in order to illustrate its viability and cost-effectiveness, with the understanding that a final solution for any client and market will be at least adjusted if not redirected by that ongoing discussion.