FIX Protocol
The language of the markets
Financial Information Exchange (FIX) Protocol is an electronic pre-trade, trade and post-trade communications protocol for the real-time exchange of securities transaction information. FIX can be described as the language of the capital markets trading landscape, utilising alphanumeric code and symbols to denote trade orders across a variety of asset classes between the buy side and sell side. FIX Protocol has become the market standard for trade communications in the financial services industry.
The model above shows four key use-cases for FIX Protocol. In particular, FIX enables nimble, real-time exchange of trade order information through a gateway network, transmitting the information to the order management systems for that specific asset class before execution via another gateway. FIX provides visibility into a financial firm’s trading activities, providing key information on aspects such as latency, trade execution quality and price discovery. A breakdown in FIX communication can lead to the loss, duplication or unfulfillment of trade orders, and potentially lead to significant financial and reputational ramifications for the firms involved. As such, FIX monitoring is arguably a prerequisite for successful trading operations, so that any issues can be isolated before they become critical.