Abstract
We build a private Cloud using off-the-shelf servers and do extensive experiments for application and performance testing. We studied a real-world application of financial option pricing by implementing two algorithms (Monte-Carlo simulation and binomial lattice for option pricing) on this private Cloud and used this application for the purpose of accuracy testing in comparison to a well established closed-form solution available as Black-Scholes-Merton formula. Also, using these algorithms we analyze performance of Cloud VMs. We compare the performance with standalone servers and found that the performance of Cloud VM is better to standalone servers when (a) the number of vCPUs are limited to a single node and (b) load balancing issues are not considered.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Ghahramani, M., Zhou, M., Hon, C.T.: Toward cloud computing QOS architectrure: analysis of cloud systems and cloud services. IEEE/CAA J. Autom. Sin. 4(1), 5–17 (2017)
Suciu, G., Ularu, E.G., Craciunescu, R.: Public versus private cloud adoption a case study based on open source cloud platforms. In: 20th Telecommunications Forum (TELFOR), pp. 494–497. IEEE (2012)
Hu, J., Gu, J., Sun, G., Zhao, T.: A scheduling strategy on load balancing of virtual machine resources in cloud computing environment. In: 2010 Third International Symposium on Parallel Architectures, Algorithms and Programming (PAAP), pp. 89–96. IEEE (2010)
Yuan, H., Bi, J., Tan, W., Zhou, M., Li, B.H., Li, J.: TTSA: an effective scheduling approach for delay bounded tasks in hybrid clouds. IEEE Trans. Cybern. 47(11), 3658–3668 (2017)
Goyal, S.: Public vs private vs hybrid vs community-cloud computing: a critical review. Int. J. Comput. Netw. Inf. Secur. (IJCNIS) 6(3), 20 (2014)
Herbst, N.R., Kounev, S., Reussner, R.: Elasticity in cloud computing: what it is, and what it is not. In: ICAC, pp. 23–27 (2013)
Wen, X., Gu, G., Li, Q., Gao, Y., Zhang, X.: Comparison of open-source cloud management platforms: OpenStack and OpenNebula. In: 2012 9th International Conference on Fuzzy Systems and Knowledge Discovery (FSKD), pp. 2457–2461. IEEE (2012)
Pepple, K.: Deploying OpenStack. O’Reilly Media, Inc., Newton (2011)
Cai, B., Xu, F., Ye, F., Zhou, W.: Research and application of migrating legacy systems to the private cloud platform with cloudstack. In: 2012 IEEE International Conference on Automation and Logistics (ICAL), pp. 400–404. IEEE (2012)
Sotomayor, B., Montero, R.S., Llorente, I.M., Foster, I.: Virtual infrastructure management in private and hybrid clouds. IEEE Internet Comput. 13(5), 14–22 (2009)
Nurmi, D., et al.: The eucalyptus open-source cloud-computing system. In: 9th IEEE/ACM International Symposium on Cluster Computing and the Grid, CCGRID 2009, pp. 124–131. IEEE (2009)
Saha, R., Sharma, B., Thulasiram, R.K., Thulasiraman, P.: A novel architecture for financial investment services on a private cloud. In: Kołodziej, J., Di Martino, B., Talia, D., Xiong, K. (eds.) ICA3PP 2013. LNCS, vol. 8285, pp. 370–379. Springer, Cham (2013). https://doi.org/10.1007/978-3-319-03859-9_32
Bajpai, D., Thulasiram, R.K.: Comparing replication strategies for financial data on OpenStack based private cloud. In: Proceedings of the IARI International Conference on Cloud Computing, Rome, Italy, pp. 139–144. IARIA (2016)
Boyle, P.P.: Options: a Monte Carlo approach. J. Financ. Econ. 4(3), 323–338 (1977)
Hull, J., White, A.: The pricing of options on assets with stochastic volatilities. J. Financ. 42(2), 281–300 (1987)
Boyle, P., Broadie, M., Glasserman, P.: Monte Carlo methods for security pricing. J. Econ. Dyn. Control. 21(8), 1267–1321 (1997)
Glasserman, P., Yu, B.: Simulation for American options: regression now or regression later? In: Niederreiter, H. (ed.) Monte Carlo and Quasi-Monte Carlo Methods 2002, pp. 213–226. Springer, Heidelberg (2004). https://doi.org/10.1007/978-3-642-18743-8_12
Rakhmayil, S., Shiller, I., Thulasiram, R.: Different estimators of the underlying asset’s volatility and option pricing errors: parallel Monte - Carlo simulation. In: Proceedings of the International Conference on Computational Finance and its Applications, Bologna, Italy, pp. 121–131. ICCFA (2004)
Hull, J.C.: Options, Futures, and Other Derivatives. Pearson Education India, Bengaluru (2006)
Ranjan, R., Buyya, R., Nepal, S., Georgakopulos, D.: A note on resource orchestration for cloud computing. Concurr. Comput.: Pract. Exp. 27(9), 2370–2372 (2015)
Mercier, G., Aumage, O.: MPICH/MADIII: a cluster of clusters-enabled MPI implementation. In: Third IEEE International Symposium on Cluster Computing and the Grid, CCGRID 2003, pp. 26–35 (2003)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer Nature Switzerland AG
About this paper
Cite this paper
Bajpai, D., Vinayak, M., Thulasiram, R.K., Thulasiraman, P. (2018). Financial Application on an Openstack Based Private Cloud. In: Xiang, Y., Sun, J., Fortino, G., Guerrieri, A., Jung, J. (eds) Internet and Distributed Computing Systems. IDCS 2018. Lecture Notes in Computer Science(), vol 11226. Springer, Cham. https://doi.org/10.1007/978-3-030-02738-4_10
Download citation
DOI: https://doi.org/10.1007/978-3-030-02738-4_10
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-02737-7
Online ISBN: 978-3-030-02738-4
eBook Packages: Computer ScienceComputer Science (R0)