Advice

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Imported from previous forum

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Hi,

I am interested in learning more about what FIX is used for? Can someone let me know in Layman’s terms?

Thanks

Brigitte

3

Brigitte,

The FPL explanation of what Fix is can be found here: http://www.fixprotocol.org/what-is-fix.shtml

This however isn’t quite as Layman-esque as you might like so I’ll give an illustration.

Traditionally a buy-side firm, fund manager/trading desk placed orders for a buy or sell of an equity with a sell-side firm. The fund manager would call a sell-side firm and make an order, the order would pass through various parties at the sell-side firm. It would finally move on to the trading floor where the sell-side firm can make the trade. Prior to fix their were two manners in which this could be done: 1) via phone calls/verbal orders 2) via a properietary trading interface

Fix standardizes the protocol that is used to move the deal information, quote request, etc from the buy-side to the sell-side. This allows a buy-side firm to connect directly to more than one sell-side firms or a sell-side firm to pass trades directly to exchanges. The standardization allows each party to implement/use it’s choice of in-house software and still allow connectivity with other parties.

Fix has expanded over the years to incorporate other types of transactions (for example: fixed income) and functions. It’s primary purpose remains the same: to standardize communication between banks, institutions and exchanges.

Hope this helps,

Adam Kravetz
TransactTools Inc

Hi,

I am interested in learning more about what FIX is used for? Can someone
let me know in Layman’s terms?

Thanks

Brigitte