Black Swan Events Vs Online Trading

The world is presently going through high inflations due to various factors such as government policies, excessive money printing, pandemic, war, and other geopolitical issues etc. So, the investment plover the world is trying in all ways to overcome the crisis by introducing various policies and changes in present economy. It provides good trading opportunities for the users.

With more and more people using websites and mobile apps for trading the user traffic on the online trading systems has increased manifolds. The online platform for trading is being used to monitor the live prices, market news, buying, selling and withholding the stocks. With the evolution of advanced trading technology people have found newer ways to invest like bot trading which can perform thousands of transactions in an hour. During the unprecedented times the sudden surge in the trading volumes because of the breakthrough news in the stock market world have hit the largest investment platforms. On Vaccine Monday, massive spikes in trading volume of up to 170% were seen. 

Online trading systems became less responsive, there were more downtime to fix the issue, traders were not able to place trades during peak trading timings, brokerage accounts are inaccessible for the users, traders even lost money which increased their frustration and reduced the trust in the trading systems of various brokers. They posted their concerns on various social media platform which caused reputation damaged in addition to loss of clients and revenue. It also resulted in regulatory compliance. These issues are often occurring during the heavy market trading days or unprecedented times or events.

Some of the worse trading outages in recent past are (source: Financial Times)

• One day long outage at Tokyo Stock Exchange in October 2020, the CEO has stepped down because of the outage. 
• One full trading sessions was lost on Australian Stock exchange.
• UK investment platforms has suffered system outage with the busiest trading volumes followed the announcement of potential Covid-19 Vaccine.

According to a survey published on statista.com, the average hourly cost of critical server
outages is between 301,000 and 400,000 U.S. dollars.

Most of the outages and slowdowns on the trading systems during trading surges are more commonly due to the system incapability to handle the increased demand. Key Market players are now focusing on building resilient trading platforms to prevent the outages in the future. 

We cannot prevent catastrophic events from happening but we can definitely improve the efficiency of the trading systems, and these outages can be prevented in future by conducting the performance engineering. Trading systems has multiple complex components and the strategy to load test and cover the complex trading scenarios that reflect the real time trading should be robust. So, the bottlenecks in the systems are assessed and identified, the necessary tuning can be incorporated to avoid the downtime and revenue loss.

In this paper, we will discuss on below points in detail:

• Impact of black swan events on Trading systems Problem/outages and the key factors that causing outages in trading systems.
• Performance Testing Strategy capable of dealing with black swan events.
• Identify potential bottlenecks in Trading Components.
• Trading infrastructure upgrade and tuning.