This document discusses the architecture of a fixed income trading platform. It outlines the key components including the front-end for traders, application servers to handle pricing, risk analytics and market data, databases to store information, and a multi-tier architecture with communication protocols. Considerations for design include scalability, processor power for calculations, and ensuring the platform is powerful yet stable and reliable. The technology team requirements and roles of quants are also summarized.

1. Fixed Income Trading
Platform Architecture
Khader Shaik

2. Architecture
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3. Gen Reqs of Trading Platform
• Reliability/Stability
• Performance
• Scalability
• Security
• Fault Tolerance
• Open Architecture
– Open APIs
– Easy Integration
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4. Front End
• Users • Technologies
– Traders – Excel + Vendor
Libraries
– Risk Management
– C++
Group
– Java
– Operations
– C# (latest
– Support development)
• Applications • Platforms
– Trade Capture – Windows
– Unix (X-Windows)
– Quote Entry
– Risk Analytics
– Operations etc.
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5. Application Servers
• Application Servers
– Pricing Engine, Risk/Analytics Engine, Market
Data Server etc
• Technologies
– Simple High Performance Architecture
– Java (Core Java)
– C++/C#
– Communication Software (TIBCO EMS,
SOAP etc)
– Vendor APIs in case vendor products, etc
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6. Database
• Database
– Sybase, Oracle, MS SQL Server etc
– MS Access for simple Excel based single user
applications
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7. Multi-tier Architecture
• Communication Protocols
– Synchronous – TCP/IP etc
– Asynchronous
• Messaging
• Messaging
– Publish/Subscribe
– Point-to-point
– MQ, Tibco etc
• Java – JMS, RMI, Sockets, WebServices
etc
• .Net – Remoting, WebServices etc
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8. Design Considerations
• Scalable and Powerful platform
• Processor Power – complex calculations
– Pricing
– Analytics
– Risk Measures
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9. Backoffice
• Usually different from Trading Systems
• Settlement
• Accounting & Finance
• Regulations/Compliance
– Usually External Service Providers
• Custodian Houses
• Many vendor softwares available
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10. Vendor Trading Platforms
• Popular FI Trading Systems
– Bloomberg Professional – Full Service
– Reuters Trading for Fixed Income – Full Service
– Winfits (just software) etc
• Differences
– Provide most of the basic features
– Connectivity with Liquidity Sources
– Algorithms of Analytics
– Risk Measures
– Support of complex products
– STP (Straight Through processing)
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11. Bloomberg/Reuters Trading Systems
• Full Service Trading Platforms
– Trade Entry
– Market Data
– Analytics
• Connect to
– Liquidation Sources (ECNs etc)
– Other Broker/Dealers
– Large Clients etc
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12. Technology Team
• Front-end Developers
– GUI developers with reasonable understanding of the
products, fundamentals of Fixed Income mathematics
• Pricing Engine
– Back-end developers
– Core language expertise (VBA, Java, C++, multi-
threading, data structures, performance etc)
– In-depth knowledge of Product Evaluation methods
– Mathematics educational background
– Ph.D, MS in math and finance, or some certifications
in finance etc
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13. Technology Team cont..
• Risk Engine
– Complex APIs and Application Server
– Advanced Math Degree
– Advanced Finance Education, Ph.D, CFA etc
– Usually available in the form of APIs or
Vendor product
• Other Technical Skill
– Platform skill – Unix scripting, architecture,
performance etc
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14. Technology Team cont..
• QA / Testing
– Good understanding of Markets and Products
– Excel (VBA)
– Good understanding of Trading
– Knowledge of Risk Measures etc
– Potential growth to move into Business/Support
• Support Team
– Provide day to day system support
– Troubleshooting
– Platform Knowledge (Unix scripting, excel, VBA etc)
– Good business knowledge
– Good Communication Skills etc.
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15. Quants
• Quantitative Analysts – Financial
Engineers
• Role
– Developing Pricing Models, Risk Models,
Trading Strategies, etc
– Assisting Traders in Trading Strategy
development and testing
– Build and Perform Regression tests, Stress
tests etc
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16. Thank You
Khader Vali Shaik
khaderv@yahoo.com
khader@orbitra.com
http://www.ksvali.com
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