📈Stock Broker System Design - Groww
Introduction
lets first try to understand what stock broker is ?
Stock brokers are authorized members of the stock exchanges (i.e. BSE, NSE).
They execute trades on behalf of the customers at the exchange. There are 100's of registered stock brokers in India offering stock trading to retail customers. At high-level, the most famous stock brokers in India are categories in 2 types:
Full-services brokers
Discount Stock Brokers
Full-service brokers offer a wide range of services including stock trading, research and advisory and local support. Discount stock brokers are online brokers specialized only in stock and commodity trading services. They do not offer add-ons like research and advisory, PMS, wealth management and branch support.
The most popular stock brokers in the full-service category include ICICI Direct, Sharekhan, HDFC Securities, Sharekhan, Angel One and Axis Bank. The most famous stock brokers in discount broker category include Zerodha, 5paisa, Groww and upstox.
We can't read system design for all the brokers but lets consider one by more number of clients .
| Stock Broker | Number of Clients ( In Millions ) |
|---|---|
Groww | 9.19 |
Zerodha | 7.22 |
Angel One | 5.98 |
Upstox | 2.4 |
Functional requirements
Price Changes are frequent in fractions of seconds.
Buy / Sell Order placement
Portfolio Management
Trade history & Reporting
Notification & alerts
Order Matching Engine
Non Functional requirements
High availability and reliability.
Low latency for real-time transactions.
Scalability to handle high volumes of trade requests.
Security to protect user data and transactions.
Compliance with financial regulations.
Architecture Diagram
List of Microservices
Considering the system like groww, it is good to have each microservices for single major functionality. There will be huge data flow in and out. Failures in one service do not necessarily impact others, improving system reliability. Having decoupling between the service dependencies, allows more flexibility and resilient architecture.
Below are the list of services required considering the above functionality. I am dividing the functionality into three categories. ( Core, Infra, Optional )
Core: These are the microservices specific to the grow as a company or product.
| Microservice | Description |
|---|---|
Market Service | Provides real-time market data to users |
Order Service | Handles the creation, modification, and cancellation of buy/sell orders |
Portfolio Service | Manages users’ portfolios and investments |
Trade History Service | Stores and retrieves historical trade data |
Trade Execution Service | Executes buy/sell orders by communicating with stock exchanges like NSE / BSE |
Order Matching Engine Service | Matches buy and sell orders within the system. This is required for internal order processing and execution efficiency. |
Price Update Service | Handles frequent price updates and broadcasts them to users |
Real-time Data Processing Service | Processes real-time data streams for market data and order execution |
Infra: These are the services required to run any kind of product. These services will be helpful when company / startup need for diversion from the existing path.
| Microservice | Description |
|---|---|
Identity Service | Manages user profiles, authentication, and authorization |
Logging and Monitoring Service | Logs system activities and monitors system health |
Payment Service | Manages financial transactions and settlements |
API Gateway Service | Provides a unified entry point for client applications |
Optional: These services are good to have for a system. Cover these services only if time permits in the interview.
| Microservice | Description |
|---|---|
Audit, Compliance Service | Ensures the system complies with regulatory requirements |
Customer Support Service | Manages customer support requests and issues |
User Preferences Service | Stores and manages user preferences and settings |
Fraud Detection Service | Detects and prevents fraudulent activities |
User Distribution
Let's assume different percentages of active users for each microservice, considering typical usage patterns.
Order Service: 30% of active clients.
Portfolio Service: 20% of active clients.
Trade History Service: 10% of active clients.
Trade Execution Service: 10% of active clients.
Order Matching Engine: Tied to order service, hence 30% of active clients.
Price Update Service: 10% of active clients, with updates for 5 companies each.
Market Data Service: 100% of companies (7,800).
Envelope Calculations
As of March 2024, Companies registered are as follows
BSE: 5421
NSE: 2379
Total companies are around: 7800
Note: There can be companies listed in both. We are not considering this corner case.
Assumptions
| Description | Value |
|---|---|
Total Users ( Groww ) | 9.19 million |
Registered Companies ( NSE and BSE ) | 7800 |
Trading hours in a day | 9:15 AM to 3:30 PM (22,500 seconds) |
Trading days in the month | 22 |
API Call Average Request/Response Size | 2 KB including headers |
Average Request Processing Time | 50 ms |
Max Requests per Server | 1000 |
Max Websockets per Server | 20,000 |
Market Service
Assumptions
| Description | Value |
|---|---|
Company Updates Per second | 5 updates per company per second |
Data per Update | 0.1 KB (100 bytes) |
Total Companies | 7,800 |
Websocket Update Required ? | No |
Storage Calculation
Total Updates per Trading Day: 7800 * 22500 = 175,500,000 Updates / day
Data per Trading Day: 175,500,000 * 0.5 KB = 87.75 GB / day
Total data per month (Assuming 22 days of trading): 16.73 GB * 22 = 1930.5 GB / Month
Servers Calculation
Market Data Ingestion
Total Updates per Second: 7,800 companies * 5 updates/sec = 39,000 updates/sec
Number of API Servers: 39,000 / 1000 = 39 servers
Order Service and Order Matching Service
Assumptions
| Description | Value |
|---|---|
Orders per User per Day | 2 orders |
Data per Order | 2 KB |
Active Users | 30% of 919,000 = 275,700 |
Storage Calculation
Total Orders per Trading Day: 9.19 m * 2 = 18.38 million orders per day
Data per Trading Day: 18.38 * 2 = 36.76 GB / day
Total Data per month: 18.38 * 22 = 808.72 GB / month
Server Calculation
API Requests per second = 275,700 / 0.05 = 5,514,000 requests/sec
Number of API Servers = 5,514,000 / 1000 = 5514 servers
Number of Websocket Servers = 275,700 / 20,000 = 13.785 = 14 ( Approx)
Portfolio Service
Assumptions
| Description | Value |
|---|---|
Updates per User per Day | 5 |
Data per update | 1 KB |
Active Users | 20% of 919,000 = 183,800 |
Storage Calculation
Total portfolio updates per Trading Day: 9.19 m * 5= 45.94 million updates / day
Data per Trading Day: 45.95 m * 1 KB = 45.95 GB / day
Total data per month (Assuming 22 days of trading): 45.95 GB * 22 = 1,010.9 GB / Month
Server Calculation
API Requests per second = 183,800 / 0.05 = 3,676,000 requests/sec
Number of API Servers = 3,676,000 / 1000 = 3676 servers
Trade History Service and Trade Execution Service
Assumptions
| Description | Value |
|---|---|
Trades per User per Day | 2 |
Data per Trade | 2 KB |
Active Users | 10% of 919,000 = 91,900 |
Storage Calculations:
Total trades per Trading Day: 9.19 m * 2 = 18.38 million updates / day
Data per Trading Day: 18.38m * 2 KB = 36.76 GB / day
Total data per month (Assuming 22 days of trading): 36.76 GB * 22 = 808.72 GB / Month
Server Calculations:
API Requests per second = 91,900 / 0.05 = 1,838,000 requests/sec
Number of API Servers = 1,838,000 / 1000 = 1838 servers
Number Of Websocket Servers = 1,838,000 / 20,000 = 91.9 = 92 Servers
Price Update Service
Assumptions
| Description | Value |
|---|---|
Price Updates per second | 1000 |
Data per Update | 0.1 KB |
Number of price updates per user | 5 |
Number of active Users | 10% of 919,000 = 91,900 |
Storage Calculations
Total updates per Trading Day: 1000 * 22,500 = 22,500,000 updates / day
Data per Trading Day: 22,500,000 * 0.1 KB = 22,500 KB / day = 2.25 GB / day
Total data per month (Assuming 22 days of trading): 2.25 GB * 22 = 49.5 GB / Month
Server Calculations
Total Price Updates: 91,900 * 5 = 459,500 updates/sec
API Requests per second = 459,500 / 0.05 = 9,190,000 requests/sec
Number of API Servers = 9,190,000 / 1000 = 9190 servers
Number of Websocker servers = 9,190,000 / 20,000 = 459.5 = 460 ( Approx)
Real-time Data Processing Service
Storage Calculations
Market Data Updates: 39,000 updates/sec
Updates Stored per Second: 1% of 39,000 updates/sec = 390 updates/sec
Total Data Size per Second: 390 * 0.01 = 3.9 KB/sec
Total Data Size per Day: 3.90 KB/sec * 22,500 = 87.75 MB /day
Total Data Size per Month: 87.75 * 22 = 1.93 GB /month
Server Calculations
Market Data Ingestion:
Active Companies: 7,800
Market Data Updates: Assume 5 updates per second per company
Total Updates per Second: 7800 * 5 = 39,000 updates/sec
Data Aggregation and Transformation:
Assume each update requires 1 additional processing step
Total Processing Steps per Second: 39,000
Event Detection:
Assume 10% of updates trigger events
Event Detection Steps per Second: 0.1 * 39,000 = 3,900
Streaming Updates:
Assume each update is sent to 30% of active users (30% of 919,000)
Active Users Receiving Updates: 0.3 * 919,000 = 275,700
Updates per User per Second: 2 (assume each user receives updates for 2 companies)
Total Streaming Updates per Second: 275,700 * 2 = 551,400 updates/sec
Data Storage:
Assume 1% of updates are stored for historical analysis
Data Storage Steps per Second: 0.01 * 39,000 = 390
Total Updates:
39,000 + 39,000 + 3,900 + 390 = 82,290 updates/sec
Number of API servers: 82,290 / 1000 = 82.2 = 83 ( Approx )
Number of Websocket Servers: 551,400 / 20, 000 = 28 Servers
Total Servers
Total Storage Required = 6227.71 GB / Month
Total API servers: 27, 692 per second
Total Websocket servers: 608 per second
Component Design
References
https://www.chittorgarh.com/report/top_20_share_brokers_in_india_by_clients_at_nse/1/ https://www.statista.com/statistics/1056499/india-leading-equity-brokerage-firms-by-active-customers/ https://www.nseindia.com/regulations/listing-compliance/nse-market-capitalisation-all-companies https://blog.shoonya.com/how-many-companies-are-listed-in-nse-and-bse/#:~:text=There%20are%20a%20total%20of%205%2C309%20listed%20companies,DVRs%2C%20REITs%2C%20InVITs%2C%20ETFs%2C%20and%20Partly%20Paid%20Shares.https://cloud.google.com/customers/groww#:~:text=Groww%3A%20Empowering%20investors%20with%20a,platform%20powered%20by%20Google%20Clouhttps://stackshare.io/groww/groww https://tech.groww.in/
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