FAQ For FIX Protocol Services and Solutions

What is the FIX protocol?

FIX stands as a short form for “Financial Information eXchange”. The FIX protocol is the specification developed for exchanging real-time financial information electronically. It is a standard information exchange protocol for pre-trade, trade and post-trade communications.

Why FIX Protocol is developed?

In 1992, Fix protocol was first initiated by Salamon brothers and Fidelity Investments. The need for FIX Protocol araised because many firms conceived their private message transferring formats. It was necessary to have some standard format for standardized communication. Hence FIX Protocol was developed for equity trading firms to exchange electronic information between buy-side and sell-side brokers and dealers.

What are the advantages of using the FIX protocol?

FIX protocol has the following advantages:

• Privacy- Taking privacy into consideration FIX protocol allows algorithms to run directly on computers without disclosing any information on commercial platforms.
• It gives global connectivity in any part of the world.
• FIX protocol creates bidirectional connectivity which helps to send and receive data in both the directions.
• FIX protocol can be used in any programming languages such as C, C++, Php, Java.

Who can use the FIX protocol?

FIX protocol can be used by:

• Buy-side institutions
• Sell-side dealers
• Sell-side brokers

Where is the FIX protocol used?

The FIX protocol is used in various scenarios such as

• Electronic trading
• Equity transactions
• Clearing open contract management
• Market rate information.

What is FIX Engine?

Fix engines is a software which makes online electronic trading easy. It can be written in any programming languages like C, C++, Php, Java. It is used to create, send and parse FIX messages and established FIX connectivity. Normally, for establishing simple FIX connectivity there are two FIX engines one running at the client-side and other running at the exchange side.

What is FIX session?

A FIX session is a two-way stream of standardized messages between two organizations within endless ordered series. While maintaining a FIX session different organizations can connect and disconnect multiple times. Connecting organizations should agree from both sides when to start and end a session, which depends upon the particular system and time zone conditions.

How does FIX protocol work?

Buyers and brokers use a software called FIX engines to connect using the FIX protocol. To start a FIX session, Buyer A and Broker B connect their engines at a deliberate start time using a deliberate host and comp ID.

As the FIX session starts, FIX messages are categorized into two groups. The first group is the admin messages and the second is application messages. Application messages include trade, pre-trade, and post-trade messages. After transferring the related information, both the buyer and the broker disconnect their FIX engine at the same time to keep their trading protected.

What is FIX Message?

FIX message is a term used to describe communication using the FIX protocol.
Whenever two FIX engines are communicating with each other using the FIX protocol that exchange of information is called a FIX message.

How can a FIX version of a FIX message recognize?

FIX version can be recognized by FIX engine configuration and by FIX message header.

What is TransactTime?

TransactTime is the time of execution or order creation

What is SendingTime?

SendingTime is the time required for message transmission

What is mean by Newordersingle?

In electronic trading, through FIX protocol Newordersingle is the most commonly used message. It is used to place an order. It is denoted by MsgType=D.

What is mean by Order Cancel Replace?

Order Cancel Replace message is used for modifying the orders in FIX protocol. It is denoted by MsgType=G.

What is mean by Order Cancel Reject Message?

Order Cancel Reject Message in FIX Protocol is used to cancel placed orders into the market. It is denoted by MsgType=F.

What is the meaning of the sequence number? Which tag is used for sequence numbers?

Sequence Number in FIX protocol provides recovery and replay functionality. It also ensures that not a single message gets lost while transmission or communication. Every message in FIX Protocol has a unique sequence number. It is defined in Tag 34.

What is the meaning of the Incoming Sequence Number?

In FIX protocol Incoming Sequence Number is the number which any FIX Engine expect from Counter Party.

What is the meaning of the Outgoing Sequence Number?

In FIX protocol, Outgoing Sequence Number is the number which any FIX Engine is sending to Counter Party.