Fix Electronic Trading Services

Electronic Trading - Financial Information Exchange (FIX)

The financial industry (particularly ECNs, traditional exchanges, buy/sell-side firms, money managers, and hedge funds) have become increasingly reliant on and accepting of the FIX (Financial Information Exchange) Protocol in recent years. Today, foreign exchange trades of derivatives and cash products, fixed income transactions, and equities are all reliant on the FIX protocol. With this growth in the use of the FIX protocol, there has been growth and development of related software products and solutions for electronic trading. These are often called FIX Engines. They help traders communicate electronically with one another and exchange information without compromising the security and integrity of the data.

Benefits using FIX

  • Enables STP (Straight Through Processing).
  • Reduces costs and increases speed by removing the need for phone calls and faxing. Traders can do what they are best at trading.
  • A mature and proven technology that gives you peace of mind with your investment. No risks from buying immature and untested technology.
  • FIX scales easily, and as your organization grows, FIX will handle your increasing trade volumes.
  • FIX grows with your needs, and allows you to do electronic trading of additional asset classes such as futures, options, fixed income, foreign exchange and more.
  • Do business with a vast number of clients and even with clients that is not fully FIX compliant.
  • Supports secure and reliable connections that protects you from system downtime, and lost revenue.

FIX Expertise

OSD offers many offshore software development services that can help corporations implement and integrate the FIX protocol. OSD has the software expertise, technical abilities, and industry-specific knowledge about finance and business to customize solutions for your corporation’s particular needs. The FIX protocol does not require that most corporations have in-house FIX experts. Hence, it is to most companies’ advantage to use the flexibility of OSD’s outsourcing services, so that they can access the technical skills and expertise whenever they’re needed, but without having a full-time on-site presence. FIX is an open protocol that fully complies with the standards of the financial industry and allows traders to electronically communicate in real time. International trading has clearly benefited from the creation, maintenance, and encouraged use of the FIX protocol. To be successful with STP (straight-through processing) and electronic trading, transactions must be highly secure and build around the FIX protocol. FIX protocol achieves this, and most of the major international firms that buy and sell in the electronic trading markets are already using FIX protocols and similar standards.

Why should my organization adopt FIX?

Here are just a few of the reasons that it would be wise for you to adopt electronic trading:

  • With electronic connectivity, you’ll have better access to liquidities, you can take advantage of the best IOIs almost instantly, and you can interact with ATS/ECN brokers at the same time.
  • You’ll have fewer failures in your trades, and you’ll be able to settle in less time. With fewer needs to intervene manually, you can find and correct errors earlier in the trading process, as well as get automatic matches for your trades.
  • You’ll have automated audit trails that are recorded electronically, orders that are quickly, easily, and accurate processed in the back end, less re-typing because FIX automatically confirms and transfers the data, and more timely information. All of this facilitates more efficient trades and better overall execution.
  • With fewer resources dedicated to retyping, quality control, and reporting, you’ll free up your staff resources, which you can then reallocate to more important tasks link analysis, critical thinking, managing exceptions, and decision-making.
  • A fully integrated OMS (order management system) will help you monitor all of the security trades in fixed income and equities, so that your disjoint processes and system will run smoothly.
  • With better computer intelligence, you’ll be able to make better decisions, finding bottlenecks whenever and wherever they occur, fully understanding your transaction costs and processes, and bale to analyze compliance and market data, as well as the order and execution of your trading flows.

A bit more technically, what is fix?

The FIX protocol that makes all of this possible is simply a string if ASCII characters that are sent back and forth between two traders. It consists of a session and application layer. Administrative messages ensure the delivery of messages and logging in and out, and are handled by the session layer. Messages at the business level, such as allocations, orders, reports of executions, and expressions of interest are processed by the application layer, and the messages are then sent by using the session layer. FIX was made to facilitate communication between two systems running on the FIX protocol (point-to-point). FIX has the option of managing one system to represent more than one firm on a single FIX connection. Broadcast information can’t be managed by FIX at the present time. Every message sent via FIX has three components. The first component, the header, includes information about the type of message, where it should be sent, and the message’s length. The second component, the body, consists of the message itself. The third and final component, the trailer, has a digital signature (optional) and the check sum, which is required for compliance. Each of these three components has four FIX fields: value, equal sign, tag, and delimiter (an ASCII character representing a value of 1).