What is FIX Engine in FIX Protocol? Examples

FIX Engine is in the heart of any  FIX protocol-based electronic trading application. W, whenever we discuss FIX protocol we talk about FIX engines, the performance of different Fix engines, support of different FIX versions on FIX engine etc. but on a basic level, we definitely like to know what is an FIX engine and what does FIX Engine do in FIX protocol. In this article, we will try to touch base on such questions with an independent view on FIX engines e.g. what is an FIX engine? Why you need FIX engines? Is FIX engine is mandatory for electronic trading? What are some commercially available FIX engines you can use to start connecting brokers using FIX protocol etc

What is a FIX Engine?

Fix engines are a program written in any programming language like Java, C++ which is used to facilitate online trading using FIX Protocol. it's an implementation of FIX protocol and a single piece of software required to establish FIX connectivity. 

FIX messages which carry stocks trading orders electronically in the form of tag and value is composed, parse and understand by FIX engines. FIX engines are also responsible for establishing FIX connectivity between client and broker or client and exchange. 

In a simple FIX connectivity setup, we have two FIX engines running one at the client-side and other at the broker or exchange side. These FIX engines first establish FIX sessions between each other and then transmit application-level messages(electronic stock order, cancels and order amendments etc). In Short FIX engine is an essential piece of software your company will require building electronic trading infrastructure.

What does FIX Engine do ?

here is a short summary of what is the responsibility of FIX engine and what does fix engine do:

1) Establish Fix Connectivity by sending session level messages.

2) manage FIX Session

3) recover if FIX session lost

4) creating, sending, parsing FIX messages for electronic trading.

5) handles replay

6) supports different FIX (Financial information exchange) protocol version and tags.

Who uses FIX Engines?

FIX Engines are mostly used by large Investment banks, brokerage firms, hedge funds, pension funds and other independent parties which are interested in electronic trading. In stock trading first FIX engines are used at two places first at client side (most of the high net worth individual, hedge funds uses FIX protocol to transmit orders to brokers) and on Exchange side if Exchange supports FIX protocol or you have connected to a broker. 

Since different exchange uses their proprietary exchange protocol (e.g. HKSE uses OG, TSE uses Arrowhead protocol and NASDAQ uses OUCH protocol), use of FIX engine on exchange side is less as compared to the client side, As clients and firms prefer to use FIX protocol for sending orders and receiving executions.

Performance of FIX Engine:

The performance of any FIX engine is key in order to be successful in online trading or electronic trading space. fastest, robust, flexible FIX Engines are proffered by brokerage firms and client alike. 

Since today's market is very volatile and sensitive due to high frequency and algorithmic trading, the speed of FIX engines has become more important and derived bigger investment banks and brokerage houses to implement or create their own Fix engines.

5 Popular FIX Engine Examples

There are a lot of commercial FIX Engines are available in the market and they are listed on the vendor page of FIX protocol. here is a quick list of popular FIX engines you may want to choose for your firm:

1. NYFIX Appia

by far most used, flexible, robust, and easy to maintain and support. what is the best feature of Appia is that it provides you to create a new FIX session on the fly and manage fix sessions without downtime in the FIX engine?

2. Cameron FIX Engine

Another popular fix engine which strictly follows FIX protocol and supports almost all of FIX protocol version.

3. Onix Biz

I have not used onixs.biz fix protocol solutions but sounds like a good candidate.

4. B2Bits

B2Bits offers fix engines and fix solutions in Java, .NET, and C++.

5. QuickFIX

this is an open course FIX Engine which has an implementation in Java, known as QuickFIXJ as well as implementation in C++ and other programming languages. If you are looking for a free-of-cost FIX engine, then QuickFIX is a good choice. 

despite these popular ones, there are lot many other players like rapid addition, Info reach, and Flyer Fix Engines.

That's all on FIX engines of the FIX protocol, you can also check my other articles on FIX protocols for getting more knowledge on how to fix protocol works etc.

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Top 20 FIX Protocol Interview Questions

FIX Protocol Session or Admin messages tutorial

What is Repeating groups in FIX

Difference between Session Level and Business message Reject

Difference between FIX 4.2 vs FIX 4.4 

Common issues on financial information exchange (FIX) Connectivity