Sequence Numbering

Sequence Numbering is a method of assigning a unique, incremental number to each message or request in a series to ensure they are processed in the correct order. In trading systems, sequence numbers prevent out-of-order execution, which could lead to incorrect position calculations or account balances.

If a server receives a message with an unexpected sequence number, it can identify a potential issue ⎊ such as a lost packet or a malicious intervention ⎊ and take appropriate action, like pausing the session. This is vital for maintaining the integrity of the state between the trader and the exchange.

By keeping track of the expected sequence, both parties can ensure that their records remain perfectly synchronized, which is the cornerstone of reliable financial settlement. It is a simple yet powerful technique for maintaining order in complex, distributed systems.