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Design low-latency trading infrastructure

Last updated: Apr 28, 2026

Quick Overview

This question evaluates understanding of low-latency trading system architecture, networking and protocol trade-offs (TCP/IP vs UDP), time synchronization, fault tolerance, observability, and operational safety when splitting functionality between a colocated box and remote offices, within the System Design domain.

  • hard
  • Optiver
  • System Design
  • Software Engineer

Design low-latency trading infrastructure

Company: Optiver

Role: Software Engineer

Category: System Design

Difficulty: hard

Interview Round: Onsite

## System design: low-latency trading system with colocated box You are designing infrastructure for an electronic trading system. - You have a **server/locker box colocated next to the exchange** (very low latency to the exchange). - Your **traders work from an office in another city** (higher latency, across a WAN). ### Prompt Design the end-to-end infrastructure needed to: - receive market data, - generate trading decisions, - manage risk, - send orders to the exchange, - monitor and control the system. Discuss: - what runs in the colocated box vs the office, - networking choices (wires/links, redundancy, bandwidth vs latency trade-offs), - TCP/IP vs UDP considerations, packet loss/ordering, jitter, - servers, time sync, observability, and operational safety. Assume extreme sensitivity to latency and correctness.

Quick Answer: This question evaluates understanding of low-latency trading system architecture, networking and protocol trade-offs (TCP/IP vs UDP), time synchronization, fault tolerance, observability, and operational safety when splitting functionality between a colocated box and remote offices, within the System Design domain.

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Optiver
Dec 5, 2025, 12:00 AM
Software Engineer
Onsite
System Design
56
0
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System design: low-latency trading system with colocated box

You are designing infrastructure for an electronic trading system.

  • You have a server/locker box colocated next to the exchange (very low latency to the exchange).
  • Your traders work from an office in another city (higher latency, across a WAN).

Prompt

Design the end-to-end infrastructure needed to:

  • receive market data,
  • generate trading decisions,
  • manage risk,
  • send orders to the exchange,
  • monitor and control the system.

Discuss:

  • what runs in the colocated box vs the office,
  • networking choices (wires/links, redundancy, bandwidth vs latency trade-offs),
  • TCP/IP vs UDP considerations, packet loss/ordering, jitter,
  • servers, time sync, observability, and operational safety.

Assume extreme sensitivity to latency and correctness.

Solution

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