What Is a Rithmic API Conformance Test?

Introduction

In modern electronic trading, reliability, speed, and correctness are not optional features—they are fundamental requirements. Trading systems interact with exchanges, clearing firms, risk engines, and market data providers through highly specialized application programming interfaces (APIs). One such API, widely used in the futures and professional trading ecosystem, is the Rithmic API.

Before a trading application is allowed to connect to live markets through Rithmic, it must typically pass a Rithmic API conformance test. This test is designed to verify that a client application behaves correctly, safely, and predictably under a wide range of conditions. The goal is to protect market integrity, trading firms, clearing firms, and end users from errors that could cause financial loss, system instability, or regulatory problems.

This article provides a comprehensive explanation of what a Rithmic API conformance test is, why it exists, what it typically evaluates, how it is conducted, and how developers and trading firms should prepare for it.

Background: Rithmic and Its Role in Electronic Trading

Rithmic is a professional‑grade trading infrastructure provider that offers ultra‑low‑latency market data and order routing services. Its technology is commonly used by:

• Proprietary trading firms

• Futures commission merchants (FCMs)

• Professional traders and algorithmic trading desks

• Independent software vendors (ISVs) building trading platforms

Rithmic’s APIs allow client applications to:

• Subscribe to real‑time market data

• Submit, modify, and cancel orders

• Receive execution reports and fills

• Track positions, P&L, and account status

• Respond to risk controls and exchange events

Because these APIs interact directly with live exchanges and clearing systems, incorrect behavior can have serious consequences. This is why Rithmic requires a conformance process.

Defining the Rithmic API Conformance Test

A Rithmic API conformance test is a formal validation process that confirms a client application correctly implements and uses the Rithmic API according to Rithmic’s technical, functional, and risk requirements.

In simple terms, it answers the question:

“Does this application behave exactly as a safe, compliant Rithmic client should behave?”

Conformance testing is not about performance optimization or trading profitability. Instead, it focuses on:

• Correct API usage

• Protocol compliance

• Stability under normal and abnormal conditions

• Proper handling of errors and edge cases

• Respect for exchange and risk constraints

Only applications that pass conformance are typically approved for production (live trading) environments.

Why Conformance Testing Is Necessary

1. Market Integrity

Electronic markets rely on predictable behavior. A single malfunctioning trading application can:

• Flood the market with erroneous orders

• Cause self‑trading or wash trades

• Create artificial price movements

• Trigger exchange‑level protections

Conformance testing ensures applications do not violate basic market rules or create instability.

2. Risk Management

Rithmic sits between trading applications and clearing firms. If an application ignores margin limits, position limits, or rejects risk messages, it can expose firms to catastrophic losses.

Conformance tests verify that:

• Risk limit messages are handled correctly

• Trading stops when required

• Orders are not submitted in invalid states

3. System Stability

Poorly implemented clients can cause:

• Excessive reconnect loops

• Memory leaks

• Message floods

• Resource exhaustion

Conformance testing ensures the application uses the API efficiently and responsibly.

4. Legal and Regulatory Considerations

Futures markets are regulated environments. Firms are responsible for ensuring that software accessing the market behaves correctly. A documented conformance process helps demonstrate due diligence and compliance.

Who Must Pass a Rithmic API Conformance Test?

Conformance testing is typically required for:

• New trading platforms built on Rithmic

• Algorithmic trading systems that auto‑submit orders

• Third‑party software vendors distributing Rithmic‑enabled products

• Custom internal tools used by proprietary firms

In contrast, end users using already‑approved commercial platforms usually do not need to undergo conformance testing themselves.

Conformance Test Environments

Rithmic conformance testing is normally conducted in a certification or test environment, not in live markets.

This environment typically provides:

• Simulated exchanges

• Market data feeds

• Order matching behavior

• Risk controls similar to production

The environment allows testers to intentionally trigger edge cases without real financial risk.

Core Areas Evaluated in a Rithmic API Conformance Test

Although exact requirements may vary by agreement and API version, most conformance tests evaluate several core areas.

1. Connection Management

The application must demonstrate correct handling of:

• Login and authentication

• Session establishment

• Heartbeats and keep‑alive messages

• Graceful disconnects

• Reconnection logic

Common failure points include reconnect storms, improper session reuse, or ignoring disconnect notifications.

2. Market Data Subscription Behavior

Applications must:

• Subscribe only to authorized instruments

• Correctly process market data updates

• Handle sequence gaps or resets

• Avoid duplicate or excessive subscriptions

The test may intentionally interrupt data streams to verify recovery logic.

3. Order Lifecycle Handling

One of the most critical aspects of conformance is order management.

The application must correctly:

• Submit new orders

• Handle acknowledgments

• Process partial fills

• Process full fills

• Modify orders

• Cancel orders

• Handle rejects

Each order must transition through valid states only. Invalid state transitions are a common cause of conformance failures.

4. Error and Reject Handling

Conformance tests often generate:

• Order rejects

• Risk rejects

• Exchange rejects

• Invalid parameter responses

The application must:

• Log errors correctly

• Notify users or strategies

• Avoid resubmitting invalid orders

• Maintain consistent internal state

Ignoring or mishandling rejects is considered a serious defect.

5. Risk Controls and Limits

The application must respect:

• Maximum position limits

• Maximum order size limits

• Maximum message rates

• Trading halts or risk lockouts

Tests may force risk violations to ensure the application stops trading when required.

6. Recovery and Resynchronization

Failures happen in real trading. Conformance tests verify the application can recover from:

• Network interruptions

• API restarts

• Missed messages

• Out‑of‑order events

The application must resynchronize positions, orders, and state without manual intervention or unsafe behavior.

7. Message Rate and Throttling

APIs often enforce rate limits. The conformance test may measure whether:

• The application stays within message limits

• Throttling is handled gracefully

• Bursts do not overload the system

Excessive message rates are a common reason for rejection.

8. Logging and Diagnostics

While not always visible to end users, conformance testers often review:

• Log completeness

• Timestamp accuracy

• Error visibility

• Audit trail quality

Good logging is essential for post‑incident analysis and regulatory audits.

Manual vs Automated Conformance Testing

Automated Testing

Many conformance checks are automated and involve:

• Scripted test scenarios

• Predefined message sequences

• Automated validation of responses

Automated tests ensure consistency and repeatability.

Manual Review

Some aspects require human judgment, such as:

• UI behavior (if applicable)

• Clarity of error handling

• Operational safety

• Overall robustness

Manual review is especially common for first‑time integrations.

Common Reasons Applications Fail Conformance

Despite careful development, failures are common. Typical issues include:

• Incorrect handling of partial fills

• Assuming synchronous behavior in an asynchronous API

• Mishandling reconnects

• Not respecting risk shutdown messages

• Submitting duplicate order IDs

• Poor error handling logic

Failing conformance does not mean the application is “bad,” only that it requires refinement before being allowed into production.

The Conformance Testing Process Step by Step

While specifics vary, the process often follows this pattern:

1. Application submission – Developer provides build and documentation

2. Initial review – Rithmic reviews scope and intended usage

3. Test scheduling – Conformance window is scheduled

4. Test execution – Automated and manual tests are run

5. Issue reporting – Failures are documented

6. Remediation – Developer fixes issues

7. Retesting – Failed scenarios are retested

8. Approval – Application is certified for production use

How Long Does Conformance Testing Take?

The duration varies widely depending on:

• Application complexity

• Quality of initial implementation

• Responsiveness of developers

• Scope of intended usage

Simple integrations may pass in days, while complex trading systems can take weeks or longer.

Preparing for a Rithmic API Conformance Test

Developers can improve their chances of success by:

• Carefully reading Rithmic API documentation

• Implementing full order state machines

• Stress‑testing reconnect logic

• Simulating rejects and risk events

• Adding robust logging and monitoring

• Avoiding assumptions about message timing

Many conformance failures result from assumptions rather than outright bugs.

Differences Between Conformance Testing and Performance Testing

It is important to distinguish:

• Conformance testing: “Does it behave correctly?”

• Performance testing: “How fast or scalable is it?”

A system can be extremely fast and still fail conformance if it violates protocol rules.

Conformance Testing and Ongoing Compliance

Passing conformance is not always a one‑time event. Retesting may be required when:

• The application is significantly modified

• A new API version is adopted

• Trading behavior changes materially

• New asset classes or exchanges are added

This ensures continued safety and compatibility.

Business Implications of Conformance Testing

From a business perspective, conformance testing:

• Protects trading firms from operational risk

• Builds trust with clearing firms and exchanges

• Reduces support and incident costs

• Improves overall software quality

While sometimes viewed as a hurdle, it is best understood as a safeguard.

Misconceptions About Rithmic API Conformance Tests

“It’s just a formality”

In reality, conformance tests are rigorous and detailed.

“Only beginners fail conformance”

Even experienced teams fail initial runs due to subtle edge cases.

“Passing conformance means the system is perfect”

Conformance means the system meets minimum safety and correctness requirements—not that it is bug‑free.

Conclusion

A Rithmic API conformance test is a critical validation process that ensures trading applications interact safely, correctly, and reliably with the Rithmic trading infrastructure. It protects markets, firms, and traders by enforcing strict standards around connectivity, order handling, risk management, and system stability.

For developers and trading firms, conformance testing should not be treated as an obstacle, but as an integral part of building professional‑grade trading software. A well‑designed application that passes conformance is not only safer—it is more robust, maintainable, and trustworthy in the high‑stakes world of electronic trading.

In the end, conformance testing reflects a simple but powerful principle: if you are going to access the markets, you must do so responsibly.