27: High Throughput Stock Exchange | Systems Design Interview Questions With Ex-Google SWE

[@tfk933]

Just made it to team matching for E5 at Meta. Your channel has been particularly helpful since you go into the actual technologies themselves and their pros and cons, which is not something you get in most systems design prep material. It is especially helpful for me coming from a startup background where I did not learn highly scalable systems on the job.

[@jordanhasnolife5163]

Absolute legend - congrats and hope you're able to see it through to the offer!

[@yiannigeorgantas1551]

The UDP broadcast + re-transmitting nodes is an interesting approach I hadn't considered. In my approach to the problem, I had used Kafka sharded by ticker to create a deterministic ordering of events for every market, and then have the matching engine, which in this case would be a Flink node, fan-out the events to all the clients. Essentially, I was thinking of something similar to notification service (video 19). In this approach though, we leverage UDP broadcast to fan-out, which is a lot more efficient because it operates at the network layer. The cost of using UDP though, is that we lose the message delivery guarantees, so we create re-transmitter nodes to re-implement those TCP protocol guarantees. This allows us to differ re-transmission to dedicated nodes instead of relying on the TCP protocol, which would have meant re-transmission handled by the matching engine, which would have reduced throughput.

[@jordanhasnolife5163]

Yeah in practice I don't believe kafka is nearly fast enough for the latency that exchanges need to operate at

[@torresoso]

I just started working at a stock exchange, this is great timing

[@jordanhasnolife5163]

Fwiw I wouldn't be surprised if the design is pretty different now! This is from like 10 years ago, but who knows!

[@emenikeanigbogu9368]

I think a Pokémon go system design video would be fire!!!

[@jordanhasnolife5163]

Interesting, haven't played since like 2015, what do you think the tough parts of this one would be

[@emenikeanigbogu9368]

@@jordanhasnolife5163 Probably the caching of pokemons location as well as preventing location spoofing, scalability, real time interaction.

[@Dusht98]

Detecting buildings and geolocation where pokemon spawns. Real time data processing maybe.

[@LawZist]

I guess it would be similar to nearby friends/ restaurant search using geohash

[@jordanhasnolife5163]

@@LawZist Well I'd say this is my main concern. I also can't remember whether every user sees the same pokemon or the client itself just randomly generates them lol.

[@dontdoit6986]

You missed the part where high-frequency trading firms placed their servers literally in the basement or in buildings next to the stock exchanges. This gave them an edge by executing trades faster than participants coming in from the wider internet. Those milliseconds of speed even allowed them to create 'dark pools' and run hypothetical trades to evaluate outcomes before deciding whether to execute or not. This gave them a huge advantage in gaming the system. Barclays and Credit Suisse were fined. the IEX was created to add a 350 millisecond "speedbump" in processing trades from some known HFT's. Of course, nothing else changed, and they do it to this day.

[@jordanhasnolife5163]

Colocation is certainly a part of how money is made

[@surenderthakran6622]

Very informative as always. One question though: why not use a log based message bus like Kafka instead on retransmitters?

[@jordanhasnolife5163]

We're using UDP so messages may arrive out of order (don't even know if Kafka can work with UDP), Kafka can only store messages in the order they come in. Not sure if it's also too slow due to writing to disk.

[@surenderthakran6622]

I meant instead of the order matcher broadcasting UDP messages it can push it's output to a message bus for the standby order matching nodes to consume. Definitely slower than UDP but much less complicated and more reliable than retransmission. It is a very interesting design though. We do not usually get to see UDP broadcast + retransmitters. I am wondering about other applications of this.

[@jordanhasnolife5163]

@@surenderthakran6622 I imagine this is one of the few. Perhaps video chat retransmitting for recordings.

[@surenderthakran6622]

@@jordanhasnolife5163 btw I had a system design round with one of the FAANG's yesterday. I was asked something similar to your top k leaderboard problem. Your video was a big help:-)

[@jordanhasnolife5163]

@@surenderthakran6622 Veryglad to hear! Hope it works out, good luck!

[@hello_interview]

Jordan has done nothing wrong!

[@jordanhasnolife5163]

Going down kicking and screaming

[@beecal4279]

Thanks for the video; In 14:44 is there limitation for secondary to rebuild primary's state? do secondary engine need to have captured the original Order message in order to generate msg #2 & #3 based off of #1? also, does it still wotk if it only got #2 or #3 instead of #1 msg?

[@jordanhasnolife5163]

Yep! The main idea here is that if we see any of the messages created by an order id we can back out the state, including the responses to it, as opposed to the original order.

[@LeoLeo-nx5gi]

Hi Jordan, thanks for sharing your knowledge here. Just one query :- I see we mentioned cons about both the partitioning techniques, so if partition by symbol would also not work, then what should be the ideal partitioning technique? (Should it be by orderID?)

[@jordanhasnolife5163]

The ideal way of doing it is still by symbol ID, there's no perfect answer here, but you do want all the orders for the same product to be on the same node.

[@seifeddinedridi4898]

Thanks for video Jordan, great work. A quick question: why not use a time-series database to store the trades? Do you think that would slow down the system considerably?

[@jordanhasnolife5163]

You might have someone listening to exchange data putting it in a tsdb, but doing this in the matching engine itself would add a network call and a disk write which probably isn't feasible.

[@NBetweenStations]

Thanks Jordan! Question about buy and sell orders. Is the idea that the actually fulfillment of the orders is handled by a service outside of this design? Thanks!

[@jordanhasnolife5163]

I'm not sure what you mean fulfillment. If you mean the delivery/recording of the stock changing hands, or the payment itself, that's done by others yeah.

[@aforty1]

Thank you Jordan! ❤

[@kevinburke3941]

Hey Jordan! Off topic but if you don't mind me asking, what made you want to switch to front end?

[@jordanhasnolife5163]

Hehe mostly a joke I'd say I do full stack work

[@htm332]

For state machine replication does the replication happen synchronously? i.e. is the request pending until both primary and backup process it?

[@jordanhasnolife5163]

I'd say asynchronously, but ideally we have enough machines listening to the matching engine that it's close to perfect in terms of not losing messages. Basically, if a message reaches a customer, it hopefully has reached at least one retransmitter.

[@surajkumardwivedi7139]

Hey guys, what was the solution for increasing throughput? since we cannot partition since cross shard call would fc us up, we cannot dedicate different server for particular stock's transaction since atomicity would get fced up then what can we do?

[@surajkumardwivedi7139]

ps: I respect your grind.

[@jordanhasnolife5163]

Not really much else to be done. You can partition at the cost of atomicity across ticker symbols, or you can just try and make things run as fast as possible on an individual node via improved hardware and software.

[@LokendraSingh-42]

50% is adding bugs to GUI 😂

[@jordanhasnolife5163]

I had thought I said buttons but bugs works too

[@lohitakshtrehan6379]

Yay new video!!!

[@MK-qp2uv]

Thank you so fucking much, I appreciate the time you spend to teach us. You are a legend.

[@chaitanyatanwar8151]

Thanks

[@JamilaJibril-e8h]

Oh my boy wait you don't you can't do we even have life .....

[@ShellyChen-u7q]

that's that "my wife's boyfriend"?!!

[@KratosProton]

BitTorrent Sustem Design please

[@jordanhasnolife5163]

Not too familiar with how torrenting works but I'll have to look into it

[@KratosProton]

@@jordanhasnolife5163 Thanks

[@sohansingh2022]

❤

[@songswithhr]

Bro did someone ever tell u, u look like Garfield comic😭

[@jordanhasnolife5163]

I'm cooked

[@Jordan-77777]

infowars app system design

[@jordanhasnolife5163]

Don't know anything about the app, care to elaborate on the tough parts?

[@foxedex447]

MY DREAMS COMING TRUE

[@jordanhasnolife5163]

Well done I saw your commen

[@darkstudio3170]

FYI : Your wife is cheating on you

[@jordanhasnolife5163]

You'd have scared me if I had one

[@darkstudio3170]

@@jordanhasnolife5163 I am stuck in team matching phase at Google , my recruiter told your feedback is positive but are not very great. It's been two months already, should I be hopeful 😔?

[@ShellyChen-u7q]

what's this? "my wife's boyfriend"?!!!

[@jordanhasnolife5163]

Are you more surprised by the fact that I have a wife, or that she has a boyfriend?

[@ShellyChen-u7q]

@@jordanhasnolife5163 hahaha, both!!! thanks for replying me, what a surprise!!! You didn't expose much of your personal life, lol, I guess it is very ally with the channel name. Would definitely want to see your wife in the video one day, and, her boyfriend?!! lol, which will turn this channel to be "Jordan has drama life", hahaha

[@jordanhasnolife5163]

@@ShellyChen-u7q Tragically, I have neither a wife, nor does my fictional wife have a boyfriend. It's just a r/wallstreetbets meme