Network Protocols Glossary
What is a network protocol? Protocols are the rules of the road for how data exists and moves on the network. They allow many different systems and computers to communicate.
Financial Information Exchange (FIX) Protocol
What is Financial Information Exchange (FIX) Protocol?
FIX is a standardized messaging protocol used in the financial industry for electronic communication between financial institutions, such as broker-dealers, exchanges, and clearing houses. It provides a common language for exchanging information related to securities trading, order routing, and settlement. The FIX protocol was originally developed in 1992 as a way for large equity trading companies to exchange information between broker-dealers and clients. FIX is now the messaging standard for the global equity markets, and is even expanding into foreign exchange, fixed income, and derivatives markets.
What is the purpose of FIX Protocol
Message Exchange: FIX messages are exchanged over a network connection, typically using TCP/IP. Each message contains a header and a body. The header specifies the message type, sender, and recipient, while the body contains the specific data being transmitted.
Message Types: FIX defines a variety of message types, including:
- NewOrderSingle: Used to send a new order to a market.
- ExecutionReport: Used to report the execution of an order.
- OrderCancelRequest: Used to cancel an existing order.
- AllocationReport: Used to allocate shares of a trade to different parties.
- MarketDataRequest: Used to request market data, such as prices or quotes.
Tags and Values: FIX messages are structured using tags and values. A tag identifies a specific piece of data, while the value provides the corresponding information. For example, the tag "44" represents the order quantity, and its value would be the number of shares being ordered.