ABOUT
TAGS
Financial
Sell Side Vs Buy Side Analysts:
A sell-side analyst works for a brokerage or firm that manages individual accounts and makes recommendations to the clients of the firm. Sell-side analysts are those who issue the often-heard recommendations of "strong buy", "outperform", "neutral" or "sell". These recommendations help clients make decisions to buy and/or sell certain stocks. This is beneficial for the brokerage because every time a client makes a decision to trade stock, the brokerage gets a commission on the transactions.
Furthermore, the recommendations of a sell-side analyst are called "blanket recommendations" because they're not directed at any one client, but rather at the general mass of the firm's clients.
A buy-side analyst usually works for a pension fund or mutual fund company. These individuals perform research and make recommendations to the money managers of the fund that employs them. Buy-side analysts will determine how promising an investment seems and how well it coincides with the fund's investment strategy
These recommendations, made exclusively for the benefit of the fund that pays for them, are not available to anyone outside the fund. If a fund employs a good analyst, it does not want competing funds to have access to the same advice
FIX stands for Financial Information eXchange protocol : is a messaging standard developed specifically for the real-time electronic exchange of securities transactions. FIX is a public-domain specification owned and maintained by FIX Protocol, Ltd.
The Financial Information eXchange (FIX) effort was initiated in 1992 by a group of institutions and brokers interested in streamlining their trading processes.
What is the role of FIX:
FIX is a series of messaging specifications for electronic communication of trade-related messages.FIX is the industry-driven messaging standard that is changing the face of the global financial services sector, as firms use the protocol to transact in an electronic, transparent, cost efficient and timely manner.
FIX is integral to many order management and trading systems.
FIX has become the messaging standard for pre-trade and trade communication globally within the Equity markets, and is now expanding into post-trade space, supporting Straight -Through- Processing (STP) from Indication-of-Interest (IOI) to Allocations and Confirmations.
FIX Session & Application Layers:
Session Layer :
Establishing and terminating the connection
Message Delivery data integrity, sequencing, addressing
Application Layer :
Business related content Order, Execution, IOI, etc.
FIX Messasge Structure:
Message Header - Identifies message type, message length, sender , destination sequence number etc.
Message Body - Contains specific session and application message content.
Message Trailer - Contains optional digital signature and required checksum value.
FIX Fields:
<TAG>=<VALUE><DELIMITER>
Message Example:
8=FIX.4.1^9=0235^35=D^34=10^43=N^49=VENDOR^50=CUSTOMER^56=BROKER^52=19980930-09:25:58 ^1=XQCCFUND^11=10^21=1^55=EK^48=277461109^22=1^54=1^38=10000^40=2^44=76.750000^59=0^10=165
Message Header Message Body
8=FIX.4.1 Begin String
9=235 Body Length
35=D MsgType
34=10 MsgSeqNum
43=N PossDupFlag
49=VENDOR SenderCompID
115=CUSTOMER OnBehalfOfCompID
56=BROKER TargetCompID
52=19980930-09:25:58 Sending Time
1=XQCCFUND Account (optional)
11=12345 ClOrdID
21=1 HandInst
55=EK Symbol
48=277461109 SecurityID (optional)
22=1 IDSource (optional)
54=1 Side
38=10000 OrderQty
40=2 OrdType
44=76.750000 Price (optional)
59=0 TimeInForce (optional)
Messasge Trailer
10=165 Checksum
Standard DVP(Delivery Vs Payment) model:
What is FIX Engine:
Financial information exchange systems to transfer financial information regarding securities trades, through and across security exchange houses or different trading partners.
What does a FIX Engine do:
FIX Engines maintain electronic connectivity with trading counterparts, communicate trading information and monitor data integrity.
How does it interact wtih the rest of the trading environment:
The communication model is point-to-point, where each instance is either a client or a server. One client can connect to multiple servers and multiple clients can connect to the same server.
Order Management System (OMS):
Order management system is as a software-based platform that facilitates and manages the order execution of securities, typically through the FIX protocol.The software allows firms to input orders to the system for routing to the pre-established destinations.It also allows firms to change, cancel and update orders.When an order is executed, the OMS must then update its database and send an execution report to the order's originating firm(broker/dealer). Typically only exchange members can connect directly to an exchange.
An OMS typically encompasses five components:
* connectivity to a broker or market, typically using FIX messaging.
* trading blotter
* post-trade support
* compliance
* portfolio modeling
FIX 4.1
FIX 4.1 had 28 messages and 211 tags
FIX 4.2
FIX 4.2 had 45 messages 446 tags
FIX 4.3
FIX 4.3 has support for some 68 messages and 658 tags
- An itemized list of all of the specific changes are in the "Release Notes" document.
- Major changes in FIX 4.3 include:
- Reorganization of the specification into 7 volumes
Volume 1 Introduction
Volume 2 FIX session protocol
Volume 3 Pre Trade messaging
Volume 4 Order and Executions (trade)
Volume 5 Post Trade
Volume 6 Data dictionary
Volume 7 Usage by Product
- Documentation represents dual syntax consisting of traditional "tag=value" and XML-based FIXML
- Fixed Income product support (note ongoing work between FPL and BMA)
- Collective Investment Vehicles (CIV) product (Mutual Funds, Unit Trusts, etc) support
- Enhanced support for Derivatives products
- Expanded support for Cross orders
- Support for swaps and multi-leg instrument orders
- "Streetside" trade capture reporting
- Enhancements to quotation messaging
- Enhancements to security and trading session definition
- Support for Asia/Pacific and Japanese requirements
Component blocks: To simplify the reading of the specification FIX 4.3 has introduced component blocks (such as Instrument Component Block).
Messasge Types
- Session Layer
Heartbeat
Resend Request
Logon/Logout
Test Request
Sequence Reset
Reject
- Application Messages
Indication of Interest
News / Email
One-way Execution
Order
Quote Request
Cancel Request
Cancel/Replace Request
Allocation
Message flow:
SWIFT Message flow
IOI ( Indications of Interest ) - msg type = 6
Quote Request - msg type = S
New Order - Single - msg type = D
Execution Report - msg type = 8
Allocation - msg type = J
Allocation ACK - msg type = P
Settlement Instructions - msg type = T
FIX equivalent messages
Narendra Kumar Dantala
A J2EE Developer
Having a masters degree in Computational Science, working in Java, developed applications on different domains such as Finanical Services, B2B, Banking, Utility...