The Financial Information Exchange (FIX) protocol was created in 1992 to serve as the “universal” communication language for international financial transactions. Since all order systems are different, there was a strong need to communicate all executions between brokers, exchanges, mutual funds, investment banks, and direct market access participants using a universal format.
FIX is the standard means of communication for trading in global equity markets, and is also heavily used in currencies, bonds, and derivatives. Every large institutional and professional market participant uses FIX to trade and has been doing so for over 25 years.
FIX works by defining preset “tags” as value placeholders. Messages are entered by defining variables in the tags – for example, the value for “side” of the trade can be a 1 for Buy or 2 for Sell, in Tag 54.
Below is a raw FIX message to place a Limit Buy order on Binance
Here is the same message represented in a more human-readable way:
There is currently no universal FIX interface to connect to crypto exchanges – each crypto exchange has its own, though not necessarily proprietary, communication standard. The lack of a standard communication protocol hinders participants’ ability to access multiple exchanges easily.
Contact us to learn more about FIX and how it can power up your trading operations.