I have heard that FIX is one of the most widely used protocols for communication of securities exchange systems (correct me if its not!!). My question is: is there any other well known protocol like FIX for this kind of communications?
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4 Answers
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I've worked in companies providing capital market solutions for companies all over the globe and I can confidently say that FIX is pretty much the industry standard when it comes to Trading. However in other areas like Post Trade and Back office functions, protocols like SWIFT are prominent.
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Every trading venue will speak FIX, either natively or they will translate to their native protocol. The problem with FIX is that the messages are big which slows things down. Pretty much the gold standard are binary-type protocols like Nasdaq's OUCH (O for orders) and ITCH for market data. FYI, FIX is NOT a market data protocol, although some trading gateways may force data through for certain types of matching like RFQ. The FIX equivalent for data is FAST but I believe there are some licensing issues which affected its adoption. When looking for speed, always go with the trading venue's native protocol. Ask if they have something OUCH/ITCH like.
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Fix is pretty much the standard if you are talking about communicating with exchanges for market data and orders. However many exchanges such as CFE also implement proprietary protocols which are much faster. For people who don’t care about microseconds, it’s often easier to use Fix so they don’t have to write and test code separately for each exchange.
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ITCH is well known protocol for Market Data. It can be used with OUCH for Order Entry.
