Step 1—Design Scope

Q: supported securities: stocks
Q: business functions:
- placing a new order
- canceling an order
Q: supports trading after normal hours: no
Q: business scale requirements:
- how many users: at least ten of thousands of users trading concurrently
- how many symbols: at least 100 symbols
- how many orders: billions of orders per day
Q: risk checks or constraints:
- user can only trade a maximum of 1 million shares per day for a single symbol
non-functional requirements:
- availability: 99.99%
- fault tolerance:
  - no data loss and fast recovery mechanisms are needed to limit the impact of a production incident
- latency:
  - round-trip latency should be at the millisecond level; focus on low 99th percentile latency
  - round-trip latency measured from the moment a market order enters the exchange to the point where the market order
    returns as filled execution
- security:
  - should have an account management system and do KYC check to verify a user's before a new account is opened
  - prevent distributed denial of service (DDoS) attacks on public page containing market data
back-of-the-envelope calculations:
- 100 symbols
- 1 billion orders per day
- the stock exchange operates for 6.5 hours per day (9:30 am to 4:00 pm) Monday to Friday
- QPS = 1 billion orders / (6.5 hours * 3600 seconds) =~ 50,000 orders per second
- peak QPS = 5 * QPS = 250,000 orders per second; trading volume is usually 5 times higher at the opening and
  closing hours

System Design : Stock Exchange