Scaling Clear Street’s Trade Capture System

At the heart of Clear Street’s technical machinery is our Trade Capture system, responsible for processing, clearing, and settling all incoming trades into our platform. The first version of the system was designed to support the initial, invitation-only launch of our platform. In the coming years, we expect to support 100x our initial trade volume and beyond. To support an expansion of that magnitude, we needed a fundamental redesign — one that easily adapts to our continuous growth.

Background

Let’s start with a brief summary of the post-trade workflow, to provide more context regarding the technical decisions made. What follows is by no means an exhaustive overview of the full trade lifecycle (there’s literally an entire book written on that), but we’ll give this concise explanation of the relevant parts in this blog post. (Note that for this discussion we’ve focused on the process for U.S. equities only).

Life of a Trade

Orders initially go through an Order Management System (OMS), which is in charge of execution. Each order is then routed to an exchange or market center (e.g., NYSE) that matches orders between buyer and seller of the stock. When a match is found, the exchange informs the OMS of the successful execution of the order, at which point it becomes a trade. After that, the OMS routes the trade to a Clearing System (e.g., Clear Street) that is responsible for the clearing and settlement process.

In conjunction, trades from all market centers are routed to the NSCC (in the US), which in turn sends instructions on the trade to the Clearing System over a FIX connection through UTC protocol. A reconciliation process occurs to match house trades (from OMS) and street trades (from NSCC). After 2 days, the trade is settled (i.e., shares between the two parties involved in the trade are exchanged) through a process called continuous net settlement (CNS).

Keep reading on our blog:

www.clearstreet.io/insights/scaling-clear-streets-trade-capture-system