Cisco Algo Speed Solution Cisco Application Optimization Solution ...

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 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 TelePresence System 1000

Cisco Nexus 7000

Cisco UCS

Cisco Unified IP Phone 7971G-G


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


Latency Management Cisco Nexus 2000

Cisco Nexus 7000

Strategy Engines Algo Complex Event Processing


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


Trade

Cisco Application Optimization Solution

Cisco ASA (Firewall)

Carrier Routing System

Market Data Bus

Risk Management Analytics

Cisco Catalyst 6500

C4900M



Exchange


AVM Traffic Collector

Cisco UCS

Market Data

Monitoring Exchange X-Connect

Feed Handler

Cisco ASA (Firewall) Client Access Network

Cisco Nexus 7000

PERFORMANCE MANAGEMENT



Execution Venues

Carrier Routing System

Cisco Nexus 7000


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.

Cisco Algo Speed Solution Cisco Application Optimization Solution ...

Cisco Algo Speed Solution Cisco Application Optimization Solution ...

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