The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

AWS, SGX and Aquis POC Demonstrates Feasibility of Cloud-Based Matching

AWS, the Singapore Exchange (SGX) and Aquis Exchange recently completed a proof of concept (POC) that confirmed the viability of situating an exchange matching engine in a cloud environment.

The POC – which focused on evaluating the core functions and connectivity latencies of Aquis’s order-matching platform in the AWS cloud – demonstrated respectable order turnaround latency and jitter measures, compared with standard optimized data centre set-ups, indicating that cloud could present a feasible hosting option for both start-up and established exchanges and execution venues.

The POC made use of AWS’s Transit Gateway facility to handle the multicast requirement that is so often cited as a barrier to migrating high-performance trading functions to the cloud.

Using Transit Gateway, the POC was able to produce matching latencies on the Aquis platform of 100-200 microseconds, compared with 13 microseconds in a fully optimized environment. After some work to reduce variability, AWS and Aquis were able to reduce jitter on the POC to just 4 microseconds, making the approach viable for trading firms accustomed to tuning their trading strategies to venues’ jitter measures.

Adrian Ip, director of product management at Aquis, calls the jitter measure “an amazing result” that supports the possibility of operating exchange matching engines in the cloud. While cloud is slower than a fully optimized data centre implementation, high-performance market participants would be able to use AWS’s Direct Connect facility – or other cloud operators’ equivalents – to create a high-bandwidth uplink from FIX engines, smart order routers and other trading algorithms hosted within traditional data centres like those operated by Equinix, Interxion and CenturyLink.

By setting access parameters based on, say, number of network hops, operators of cloud-based exchanges could ensure a level playing field while eradicating the need and expense of operating colocation facilities. Ip reckons the set-up costs for establishing matching in the cloud could represent an 80%-90% savings versus traditional platform implementations within data centres. He also suggests that cloud’s higher levels of resilience could go some way to reduce the outages experienced by such high-profile markets as Australian Stock Exchange, Japan Exchange Group and Euronext.

To facilitate the POC, says Ip, the partners created multiple virtual private clouds (VPCs) that used the Transit Gateway facility to handle connections to trading entities’ FIX engines situated within those entities’ AWS instances. Through this connection, the POC was able to control access to the matching engine, ensuring security and resilience.

Related content

WEBINAR

Recorded Webinar: Integrating Intelligent Machine Readable News

Intelligent machine readable news is a powerful tool in the arsenals of trading and investment firms seeking competitive advantage. It turns unstructured data into actionable insight and can be used, for example, to uncover market trends, identify correlations and evaluate sentiment. In turn, it can inform quant strategies and predictive models. While machine readable news...

BLOG

Beyond Cryptocurrencies – Building a Market Infrastructure for Digital Assets

Mention digital assets, and most people will immediately think of cryptocurrencies. This is perhaps not surprising, as ownership of digital assets is currently dominated by the two leading cryptocurrencies, Bitcoin and Ethereum. The fast-evolving world of digital assets now goes way beyond the realm of cryptocurrencies, however, and has the potential to open up a...

EVENT

TradingTech Summit Virtual (Redirected)

TradingTech Summit (TTS) Virtual will look at how trading technology operations can capitalise on recent disruption and leverage technology to find efficiencies in the new normal environment. The crisis has highlighted that the future is digital and cloud based, and the ability to innovate faster and at scale has become critical. As we move into recovery and ‘business as usual’, what changes and technology innovations should the industry adopt to simplify operations and to support speed, agility and flexibility in trading operations.

GUIDE

Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...