Financial Data Telephone Commutation (Fix) Protocol Interview Questions Answers

Financial Information Exchange (FIX) Protocol Interview Questions together with Answers
Some to a greater extent than Fix protocol interview question , I volition position reply along when I'll acquire to a greater extent than or less fourth dimension for at nowadays merely questions :)

Now I possess got updated it amongst answer, Please allow me know if yous possess got whatsoever doubt, or yous possess got other questions, yous tin give notice likewise contribute yesteryear whatsoever enquiry asked during any FINANCIAL INFORMATION EXCHANGE (FIX) protocol interview.

What produce yous hateful yesteryear Warrant?
Warrant is a fiscal production which gives right to holder to Buy or Sell underlying fiscal security, its similar to selection amongst to a greater extent than or less differences e.g. Warrants are commonly issued yesteryear banks piece options are primarily traded inwards exchange.

What is hateful yesteryear Settlement of Securities? When Settlement does occur?
In Simple term Settlement agency coin volition deducted from buyers together with trouble organisation human relationship together with security(Shares) volition endure credited to his trouble organisation human relationship , commonly Settlement occurs after few days of merchandise engagement for most of the telephone commutation its T+3 (i.e. Three days later merchandise date) , T denotes Trade engagement agency the engagement on which transaction has taken place.
For to a greater extent than or less of the exchanges e.g. NSE India, SEHK Hongkong its T+2.

What is NewOrderSingle, OrderCancelReplance together with OrderCancel Reject message?
These are the basic, most commonly used messages inwards Electronic trading via FINANCIAL INFORMATION EXCHANGE (FIX) protocol.
NewOrderSingle message is denoted yesteryear MsgType=D together with its used to house an Order, OrderCancelReplace Request is modification asking denoted yesteryear MsgType=G inwards FINANCIAL INFORMATION EXCHANGE (FIX) protocol together with used to modify Order e.g for changing quantity or toll of Order.

OrderCancelRequest is tertiary inwards this category denoted yesteryear MsgType=F inwards FINANCIAL INFORMATION EXCHANGE (FIX) protocol together with used to cancel Order placed into Market.

What are most common issues run across when 2 FIX Engine communicates ?
When Clients connect to broker via FINANCIAL INFORMATION EXCHANGE (FIX) protocol, in that location FIX engine connects to each other, piece setting upwards together with during farther communication many issues tin give notice occur below are to a greater extent than or less of most mutual ones:
Issues related to network connectivity
Issues related to Firewall rules
Issue related to wrong host/port advert piece connecting.
Incorrect SenderCompID together with TargetCompID
Sequence Number mismatch
Issue related to FINANCIAL INFORMATION EXCHANGE (FIX) version mismatch

What produce yous hateful yesteryear Incoming Sequence No together with Outgoing Sequence No? Which tag is used to comport Sequence No?
Sequence Number is really of import concept of FINANCIAL INFORMATION EXCHANGE (FIX) protocol which essentially provides it Recovery together with replay functionality together with ensures that no message volition lose during transmission or communication. In FINANCIAL INFORMATION EXCHANGE (FIX) protocol every message contains a unique sequence number defined inwards tag 34. Logically nosotros tin give notice dissever sequence number into 2 Incoming together with Outgoing Sequence number.
Incoming sequence number is the number whatsoever FIX Engine expecting from Counter Party together with Outgoing sequence number is the number whatsoever FIX engine is sending to Counter Party.

What happens if Client connects amongst Sequence No higher than expected?
If Client FIX Engine connects to Broker Fix Engine amongst Sequence Number higher than expected (e.g. broker is expecting Sequence Number = 10 together with Client is sending = 15). As per FINANCIAL INFORMATION EXCHANGE (FIX) protocol Broker volition possess got the connexion together with trial a Resend Request (MsgType=2) asking Client to resend missing messages (from messages 10 -15) , Now Client tin give notice either replay those messages or tin give notice trial a Gap Fill Message (MsgType=4 equally per FINANCIAL INFORMATION EXCHANGE (FIX) protocol) inwards illustration replaying those messages doesn't brand whatsoever feel (could endure admin messages e.g. Heartbeat etc).

What produce yous hateful yesteryear Funari Order type?
Funari is really pop Order type commonly used inwards Japanese together with Korean marketplace , its denoted yesteryear OrdType=I in FIX protocol , In Funari Order type Order volition rest inwards Market equally Limit Order but during Market Closing menstruation , if in that location is whatsoever unexecuted quantity therefore it volition plough into a Market Order.

What produce yous hateful yesteryear Odd lot together with Board lot?
In Exchanges every Security traded inwards lot e.g. lot of 1, 10 or 100 or 1000. These are called Board lots together with piece placing gild clients demand to transportation Order quantity multiple of Board lot. If Clients sends whatsoever Order which is non a multiple of Board lot therefore its called Odd lot.

What happens if Client connects amongst Sequence No lower than expected?
If Client FIX engine connects to broker FIX engine amongst Sequence No lower than expected than broker FIX engine volition disconnect the connection. As per FINANCIAL INFORMATION EXCHANGE (FIX) protocol customer therefore may endeavor yesteryear increasing its sequence Number until broker accepts its connection.

What is the departure betwixt PossDup together with PossResend?
As per FINANCIAL INFORMATION EXCHANGE (FIX) protocol PossDupFlag (tag 43): indicates possible retransmission of message amongst this sequence number valid value:
                                    Y = Possible duplicate
                                    northward = Original transmission

PossResend (tag 97): Indicates that message may comprise information that has been sent nether to a greater extent than or less other sequence number.
                                    Valid Values:
                                    Y=Possible resend
                                    N=Original transmission

In Simple terms PossDup is when yous are resending a message together with PossResend is when yous are sending a novel message amongst same information yous possess got already sent inwards a previous message.

Let’s reckon below utilization illustration for clarity with PossDup, yous tin give notice transportation out an gild amongst Sequence number of 10. Then yous transportation to a greater extent than or less other message amongst a number of 11. For to a greater extent than or less argue the counter party did non have message 10 together with volition asking a resend. You volition therefore resend this same message amongst a sequence number of 10 mark tag 43=Y.

In illustration of PossResend, yous may transportation out an order, ane time to a greater extent than let's tell amongst a sequence number of 10. After v seconds, yous possess got non gotten an acknowledgement. So yous may determine to endeavor ane time to a greater extent than because perhaps the counterparty didn't have or got the outset time. So yous volition transportation out a message amongst a dissimilar sequence number similar 11, which volition comprise all of the same information message number 10 did. You volition therefore score it equally a PossResend. So this is maxim yous possess got already sent this gild before, which Counter political party may or may non possess got processed.

While treatment of PossDups is dictated yesteryear session logic, PossResends are dictated yesteryear buisiness logic (e.g. Reject an Order if ClOrdID is duplicate etc). This is because it is upwards to the trouble organisation layer to determine if a detail trouble organisation object has been processed (by checking the gild id for instance).

You possess got bought a stock at INR 100 together with desire to sell it equally shortly equally it hits INR 110. If yous desire to guarantee that your sell gild is filled, which of the next types of gild should yous place?
In this illustration yous tin give notice non utilization restrain gild because restrain gild doesn't guarantee execution if in that location are similar LIMIT gild exists therefore it volition hold back for its turn. You tin give notice non either utilization Market Order because it didn't give yous Price guarantee together with volition fill upwards on electrical flow price. Solution is to utilization "STOP" gild amongst halt toll 110, equally shortly equally toll reaches 110 it volition acquire activate but inwards illustration of high volatility it tin give notice fill upwards to a greater extent than or less 110 if toll is moving really fast.

Which of the next orders would endure automatically canceled if non executed immediately?
Fill or Kill (FOK) together with Immediate or Cancel (IOC) orders are types of gild which either executed forthwith or acquire cancelled yesteryear exchange. TimeInForce (tag 59) inwards FINANCIAL INFORMATION EXCHANGE (FIX) protocol is used to score an gild equally FOK or IOC.

What is the departure betwixt FOK gild together with IOC Order?
Main departure betwixt FOK together with IOC Order is that FOK demands amount execution of gild i.e. all quantity has to endure filled piece IOC gild is ready to possess got partial fills also?

What is STP (Straight through Processing) Systems?
STP is abbreviation of "Straight though processing" which denotes trading systems which requires either no manual interaction or to a greater extent than or less manual interaction for whole merchandise life cycle e.g. everything later submission of Order e.g. processing, execution, booking, allocation, small town occurs automatically.

NON STP systems require manual interaction on to a greater extent than or less phases of merchandise life cycle e.g. booking or settlement.

Further Learning
The Fix Guide: Implementing the FIX Protocol 2nd Edition
Building Winning Algorithmic Trading Systems
Trading Systems together with Methods yesteryear Perry J. Kaufman
Linux Command Line Interface (CLI) Fundamentals
TCP/IP Networking for Developers

To larn to a greater extent than almost FINANCIAL INFORMATION EXCHANGE (FIX) protocol read my FINANCIAL INFORMATION EXCHANGE (FIX) protocol tutorial series