Changelog



## What is FIX Protocol?

FIX (Financial Information Exchange) Protocol is the **language of electronic trading**. It is a standardized messaging format used by financial institutions to **communicate trade-related information quickly and efficiently**.

Imagine FIX as the **WhatsApp for financial markets**, where brokers, exchanges, hedge funds, and banks exchange trade orders, executions, and market data instantly.

## Why Was FIX Created?

Before FIX, traders relied on **phone calls and faxes** to place and confirm trades. This process was slow, error-prone, and inefficient. FIX was introduced in **1992** to solve this problem by allowing **automated, real-time trade communication**.

## How Does FIX Work?


FIX messages are **structured text messages** that follow a specific format. Each message consists of **tags and values** that represent trade details. Here’s an example of a simple FIX message:

```fix
8=FIX.4.2|9=100|35=D|49=BUYER|56=SELLER|55=AAPL|54=1|38=100|40=2|10=123|
```

### Breaking it down:
- **8=FIX.4.2** → FIX version
- **35=D** → Message type (D = New Order)
- **49=BUYER** → Sender (Buyer)
- **56=SELLER** → Receiver (Seller)
- **55=AAPL** → Stock symbol (Apple)
- **54=1** → Side (1 = Buy)
- **38=100** → Order quantity (100 shares)
- **40=2** → Order type (2 = Limit Order)
- **10=123** → Checksum (ensures message integrity)

These tags ensure that all participants **understand the trade details without confusion**.

## Who Uses FIX?

FIX is used by:
- **Banks & Brokers** – To send trade orders and confirmations.
- **Exchanges & ECNs** – To process electronic trades.
- **Hedge Funds & Asset Managers** – To automate trading strategies.
- **Market Data Providers** – To distribute live price data.

## Why is FIX Important?
✅ **Speed** – Trades happen in milliseconds.
✅ **Standardization** – All market participants use the same language.
✅ **Automation** – Reduces human errors and manual work.
✅ **Global Adoption** – Used by nearly all financial firms worldwide.

## Conclusion

FIX Protocol is the **backbone of modern electronic trading**. It enables seamless, automated communication between traders, brokers, and exchanges. If you're working in finance or algorithmic trading, **understanding FIX is essential**.

🚀 Want to learn more? Stay tuned for future posts where we dive deeper into FIX message types, connectivity, and implementation!


Blog/Changelog

FIX Protocol for Dummies: A Simple Guide