Cisco High-Performance Trading Fabric—No Compromise
BUY-SIDE ARCHITECTURE
SELL-SIDE ARCHITECTURE
EXECUTION VENUES
Market Data
www.cisco.com/go/financialmarkets
FIX Gateways
Matching Engines
Clearing
Settlement
Symbologies
(NASDAQ, CBOT, ARCA, CME, OPRA, etc.)
Cisco UCS C-Series
Sell-side Network
Cisco WebEx Server
ONS, ASR, CRS
Order Routing
Network (SFTI, Reuters, etc.)
Latency
Management
Cisco Unified
Communications Manager
Metro Service
Non-Members
Latency
Management
Cisco Unified Presence
Latency
Management
Cisco
Catalyst 6500
Latency
Latency
Management Management
Cisco
Nexus 7000
PoPs
Cisco Unified Presence
Exchange X-Connect
Service Core
Cisco Catalyst 6500
Latency
Management
Latency
Management
Feed Handlers
Cisco TelePresence Manager
Cisco Nexus 7000
Cisco
Catalyst 6500
low
er F ed-A
Fe d-B
Fee
low
er F
Ord
Ord
Firm / Colors
via MetroE or DWDM
Cisco TelePresence Manager
Cisco Nexus 7000
Portfolio Management
Campus Core
TelePresence Multipoint Switch
TelePresence Multipoint Switch
Campus Core
DC Core
Cisco
ASA 5585-X
DC Core
Analytics and Quantitative
Algorithmic Engines
Firm / Colors
via MetroE
Order Flow
Cisco Unified
Communications Manager
Cisco Nexus
7000
Wavelength Service
Members
Cisco Nexus 5500 or Nexus 3000
•••••
Feed-A
Cisco WebEx Server
Liquidity
Venues
Feed-A
Latency
Management
Cisco
Nexus 7000
Order Flow
Data Center Core, Campus Core,
Market Data Providers (Reuters, Bloomberg)
Or
Fe der F
Fee ed-A low
Ord d-B
er
Flo
w
Cisco Catalyst
4900M
Cisco Catalyst
4900M
Cisco
Nexus 5500
or Nexus 3000
Cisco
Nexus 5500
or Nexus 3000
Cisco UCS
C-Series
Cisco UCS
C-Series
Client Access
Exchange Owned
Firm Owned
Firm / Colors via
MetroE or DWDM
Trading Core
Cisco TelePresence System 1000
Risk Management
Reporting
Cisco UCS
Rack 1
Cisco Unified IP Phone 7971G-GE
Rack 2
HPC Grid (Risk Analytics)
IP Turret
Execution Engines Smart
Order Routing
IP Turret
Cisco Nexus 5500
or Nexus 3000
Cisco TelePresence System 1000
Cisco Nexus 7000
Cisco UCS
Cisco Unified IP Phone 7971G-G
Cisco Nexus 5500 or Nexus 3000
Rack 1
Rack 2
Feed Handlers Algo /Strategy
Engines Smart Order Routing
Execution Engines
•••••
Feed Handlers Algo /Strategy
Engines Smart Order Routing
Execution Engines
Firm-1
Firm-2
Firm-N
Traders
HPC Grid (Risk Analytics)
Traders
•••••
Feed Handlers Algo /Strategy
Engines Smart Order Routing
Execution Engines
The Cisco® High-Performance Trading (HPT) solution portfolio provides a next-generation trading platform that supports the most demanding financial services requirements. It
incorporates a comprehensive set of networked services, including connectivity, market data, order management and execution, financing, funding, risk management, and payments
and settlement. These services give the ability to execute end-to-end in real-time. With Cisco HPT solutions, you can increase revenues and trading profits, mitigate risk, help ensure
comprehensive compliance with regulatory requirements, and help your trading operation to scale dynamically with demand.
Cisco Power Trader Solution
The Cisco HPT solution portfolio addresses the following business imperatives:
· Increase profits generated by automated trading
· Reduce operational costs by virtualizing resources in the back-office
· Improve trader and sales desk productivity and mobility
· Increase transaction visibility for compliance with best execution
· Offer global expertise in multi-asset classes anytime, anywhere
· Expansion into new financial markets, globally and new asset classes
· Reduce risk by providing real-time scenario modeling and risk
Cisco Algo Speed Solution
Enables automated trading applications
to communicate faster and handle high
volumes of market data predictably
and reliably
Integrates next-generation turrets with
new collaboration tools to increase trader
productivity and client satisfaction
AUTOMATED TRADE LIFECYCLE
Service
Provider
Buy-Side
Cisco Performance Management
Solution
Enables firms to optimize latency and
maximize trading performance by
providing micro-visibility, service qualityaware forensics, and actionable analytics
Monitoring
Portfolio
Modeling
Monitoring
Trade
Access
Routers
WAN / Firm
Latency
Management
AVM Node
Collector
Reporting/
Compliance
Risk Management
Cisco Nexus 5500
or Nexus 3000
Latency
Management
Cisco Nexus 2000
Cisco Nexus 7000
Strategy Engines
Algo Complex
Event Processing
Cisco Nexus 5500
or Nexus 3000
Execution
Platform
OMS, SOR
ACK
LEVERAGING THE CLOUD FOR RISK ANALYTICS
Co-Location
Service
1
Trade
Financial
Information
Exchange
Gateway
2
Cisco UCS
Trade
3
Cisco UCS
Reporting/
Compliance
Market Data
Bus
Matching
Engines
Trade
Trade
Proximity
Service
Trade
Improves application performance
and data center efficiency, reducing
operational costs and improving
business agility
Cisco UCS
Cisco Nexus
7000
Financial
Information
Exchange
Gateway
Trade
Cisco Application Optimization
Solution
Cisco
ASA
(Firewall)
Carrier
Routing
System
Market Data
Bus
Risk
Management
Analytics
Cisco
Catalyst 6500
C4900M
Cisco Nexus 5500
or Nexus 3000
Cisco ASA
(Firewall)
Exchange
Cisco Nexus 5500
or Nexus 3000
AVM Traffic
Collector
Cisco UCS
Market
Data
Monitoring
Exchange
X-Connect
Feed
Handler
Cisco ASA
(Firewall)
Client Access
Network
Cisco Nexus 7000
PERFORMANCE MANAGEMENT
Financial
Information
Exchange
Gateway
Cisco ASA
(Firewall)
Execution
Venues
Carrier
Routing
System
Cisco Nexus 7000
Financial
Information
Exchange
Gateway
Optical
Transport
Monitoring
Direct Market Access
Order
Routing
Cisco
UCS
Latency
Management
Service
Provider
Sell-Side
•••••
•••••
Custodian
Bank
Cisco AVM Node Analyzer
and Traffic Analyzer
Cisco provides low-latency switching and
optical links to connect market participants
to the market data provider feeds.
STEP 1
Execution Venues and Market Data
Providers such as Thomson Reuters and
Bloomberg Send Market Data to Market
Participants
Market data originates at the execution venues
and carries pricing information for financial
instruments. Market data is received by the feed
handlers at the sell-side firm, which normalize
and clean the data, then send it to the consumers
using the market data messaging bus, which
provides a reliable delivery mechanism.
Cisco multicast-enabled switches and
routers help propagate market data in a
scalable and efficient manner.
STEP 2
Risk analytics performance can be
improved by running on the Cisco Unified
Computing System (UCS).
STEP 3
Market Data is Distributed to Consumers
Algo Triggers a Trade
The market data bus distributes the data to
consumers, such as strategy engines,
algorithmic trading applications, pricing
engines, and pretrade risk management
applications. On the buy-side, the consumers
are risk management and portfolio modeling
applications.
The Cisco Algo Speed engine processes the
data and triggers a trade if the conditions are
met. The trade goes to the risk management
application for a checkpoint.
Communication between these applications
can be accelerated by Cisco 10-Gbps
low-latency switching.
STEP 4
4
Market Data Providers
Clearing
Cisco Application Visibility and Management
(AVM) can measure Financial Information
Exchange (FIX) messages latency.
STEP 5
The Trade is Processed by the Execution
Platform
The Trade Travels between Sell-side and
Exchange
If it passes the risk check the trade is sent to the
order management system (OMS), which logs the
order and passes it to the smart order routing
(SOR), which chooses the execution venue. This
decision is based on security price, liquidity,
latency, and other criteria such as volume,
anonymity, transaction cost, etc. For compliance
reasons, the firm has to record all the pertinent
information to prove best execution.
The trade order is sent to the Financial Information
Exchange (FIX) gateway, which creates the order
in FIX protocol format and sends it to the
execution venue’s FIX gateway. The venue FIX
gateway sends an acknowledgement (ACK)
message. The ACK round–trip-time (RTT) is
measured by the monitoring tools to determine if
the execution venue is fast enough. The execution
platform might cancel the trade if RTT is too high.
Cisco optical transport switches provide
a fast path between the market
participants and the execution
venues.
STEP 6
Cisco low-latency switches and Cisco
Unified Computing System (UCS) provide
the speed and reliability for this
mission-critical environment.
STEP 7
1
Monte Carlo simulation
requires 6,000 additional
cores for three hours
Check availability, latency
and cost to determine
optimal location
Risk calculations require
increased compute resources
Request
Resources
Corporation
Data Center
4
Simulation
Workload Deployed
Exchange
XYZ
2
Establish secure tunnel to
access resources.
Exchange XYZ leverages
UCS to provide
on-demand compute
leveraging a secure
multi-tenancy architecture
3
Core
Amazon
Simulation workload
deployed; corporate data
center utilization is
adjusted accordingly
Proximity Hosting
Provider
Cisco provides performance without loss,
protecting high-frequency trading engines
from the impact of microbursts.
STEP 8
Cisco provides scalable networking
solutions for all market participants.
STEP 9
STEP 10
The Trade is Matched
Co-Location and Proximity Services
Direct Market Access
Execution Report
The Trade is Cleared
The trade order is sent to the execution
venue’s matching engine, which pairs sell
orders with buy orders of the given quantity
and vice versa.
In the case of co-location, the sell-side places
their strategy engines and pre-trade risk
systems at the execution venue. The trade then
goes to the matching engine, via the Exchange
Cross-Connect (Exchange X Connect). In the
case of Proximity Service, the strategy engine
is located at the service provider data
center. The Exchange X Connect is a highspeed connection between the multiple
co-location users and the exchange systems.
In the case of direct market access (DMA), the
buy-side firm triggers the trade. They use a
sell-side firm infrastructure to access the
execution venue and to perform the pretrade
risk check.
After the trade is executed, the matching
engine sends a notice of execution (NOE)
report back to the sell-side firm.
In order to settle the trade, the parties
involved use a clearing firm. The funds are
moved from the buyer‘s account to the seller’s
account. The buy-side firms use a custodian
as an intermediary for clearing.