The Financial Information eXchange (FIX) protocol is an electronic communications protocol that is used to transmit information related to financial transactions, such as orders, trades, and quotes. It is used by buy-side and sell-side institutions to communicate with each other in real-time, in order to facilitate workflow and increase efficiency in the trading process.
This protocol was developed in the 1990s by a group of international investment bankers and software developers in order to standardize the communication of financial market data. It was designed to not only be easy to use and understand, but also to provide a framework for faster execution of orders and smoother processing of trades.
The FIX format consists of a series of five-character tags, each representing different components of the message protocol. For example, a tag might identify the price, the type of security being traded, or the time of transaction. All of the information is entered into a message string, which is then encrypted and sent over the FIX protocol.
The FIX protocol is widely used in the financial industry, and is supported by a number of exchanges and trading venues, including the London Stock Exchange, NASDAQ, and the Tokyo Stock Exchange. It is an open-source protocol, meaning that anyone can develop and use software compatible with the protocol. This makes it easier for firms to integrate with one another and within the financial ecosystem.
