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QA Function for Low Latency Trading Platform

QA Function for Low Latency Trading Platform. Agenda. Latency : Definition and Importance. Definition. Latency - a synonym for delay, is an expression of how much time it takes for a packet of data to get from one designated point to another

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QA Function for Low Latency Trading Platform

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  1. QA Function for Low Latency Trading Platform

  2. Agenda

  3. Latency : Definition and Importance Definition • Latency - a synonym for delay, is an expression of how much time it takes for a packet of data to get from one designated point to another • When talking about latency in the context of capital markets consider the round trip between trade initiation event and trade execution event. • Latency involves Processing time and Propagation time Buy Side Client Brokerage Firms Trading Venue/ Exchanges A B C D H G F E Propagation Time Propagation Time Processing Time Processing Time Importance • Buy Side firms want to be closer to the liquidity (exchange matching engine) • Faster access to market benefits the Arbitrage Trader. • Cancelling Open Orders quickly - those who cancel first will reduce their potential losses • High frequency Traders hold the positions for as low as milliseconds employing computerized algorithms and hence very sensitive of the processing speed of markets and of their own access to the market.

  4. Low Latency Application Architecture - QA checkpoints Exchange Client 1 2 3 Client Facing Component(FIX Engine) Market Facing Component Proprietary Protocol FIX Protocol 4 Native / ExchangeProtocol Proprietary Protocol 5 OMS Booking Apps Backfiller Component 1 2 3a 3b 4 5 Validating the message received from the client. Validating Proprietary Protocol conversion within the application Validating the message sent to the exchange/ destination trading venues. Responses received from destination venues. Reports sent back to the client. Message sent to internal OMS systems for trade reporting and settlement.

  5. Risks involved - QA significance

  6. Case Study:QA Function for Low Latency Platform of a Global Bank

  7. Global QA Team - Effective Test Management Before After US UK APAC US UK APAC Off-shore QA Team Off-shore QA Team Off-shore QA Team Off-shore QA Team US Team UK Team APAC Team Global Team Leveraging Regional Synergies Improving quality of work by building a strong team Removing redundancies and duplicity. KeyObjective

  8. Global QA Team – Key Benefits Sharing ofIssues/ Defects Training andKnowledgesharing Leveraging regional bestpractices Streamlinedreporting Test Casereusability GlobalQA Team EffectiveResource utilization FIXprotocoltesting Buildinga strong SME team PeopleBenefits

  9. Best Practices – QA Methodology Aligning with Rapid Deployment Process “Follow the sun” model Automated regression suite Real time production scenarios testing Build tracking mechanism Exploratory Testing Value Added Testing

  10. QA Service Offering Regression Testing • Regression testing is performed to ensure any new functionality/bug fixes do not impact the existing functionality • Regression test suites are maintained, updated and validated periodically to ensure that critical bug fixes/changes make it to the test suite which would be executed on future releases.  Functional Testing • Functional Testing to test new functionalities/enhancements/ requirements and bug fixes in the new release/ build provided by Development team.  Automated Testing • In-house automation tools are used to automate a substantial amount of test cases. • The tool utilizes the record and replay functionality, parsing the logs and replaying against simulators. • As the FIX logs have similar pattern this helped in reusing the same component for automation efforts in other regions also.  Performance Testing • Performance team engaged to provide performance figures to calculate the round trip delays in QA environment against available simulators/exchange sessions. • The performance figures even though not realistic provide benchmarks for QA team for further deployments.  Capacity/Load Testing • Capacity and Load testing performed to identify the benchmark capacity figures for the application and also to test the application behavior under variable loads, like multiple client connections. 

  11. Appendix -1 : QA Metrics Total Team Size: Around 7 Total QA Drops: 200+ Yearly Total Defects Raised:290+ Yearly Test Case Executed:Around 17000+ Yearly Indicative QA Metrics for Global QA team supporting low latency applications

  12. Q & A

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