Top 100+ Fix Protocol Interview Questions And Answers
Question 1. What Do You Mean By Warrant?
Answer :
Warrant is a economic product which gives right to holder to Buy or Sell underlying financial protection, its just like choice with some differences e.G. Warrants are typically issued by way of banks even as options are ordinarily traded in trade.
Question 2. What Is Mean By Settlement Of Securities? When Settlement Does Occur?
Answer :
In Simple term Settlement approach money will deducted from buyers and account and security(Shares) may be credited to his account , commonly Settlement takes place after few days of change date for most of the change its T+three (i.E. Three days after exchange date) , T denotes Trade date method the date on which transaction has taken place.
For a number of the exchanges e.G. NSE India, SEHK Hongkong its T+2.
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Question 3. What Is Newordersingle, Order Cancel Replace And Order Cancel Reject Message?
Answer :
These are the basic, most typically used messages in Electronic buying and selling via FINANCIAL INFORMATION EXCHANGE (FIX) protocol.
NewOrderSingle message is denoted by using MsgType=D and its used to location an Order, Order Cancel Replace Request is change request denoted by way of MsgType=G in FINANCIAL INFORMATION EXCHANGE (FIX) protocol and used to alter Order e.G for converting amount or price of Order.
Order Cancel Request is 0.33 in this class denoted by using MsgType=F in FINANCIAL INFORMATION EXCHANGE (FIX) protocol and used to cancel Order positioned into Market.
Question four. What Are Most Common Issues Encounter When Two Fix Engine Communicates?
Answer :
When Clients connect with dealer through FINANCIAL INFORMATION EXCHANGE (FIX) protocol, there FIX engine connects to each different, at the same time as setting up and at some point of in addition conversation many issues can occur beneath are some of most common ones:
Issues related to network connectivity.
Issues associated with Firewall policies.
Issue related to wrong host/port call while connecting.
Incorrect SenderCompID and TargetCompID.
Sequence Number mismatch.
Issue associated with FINANCIAL INFORMATION EXCHANGE (FIX) model mismatch.
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Question five. What Do You Mean By Incoming Sequence No And Outgoing Sequence No? Which Tag Is Used To Carry Sequence No?
Answer :
Sequence Number may be very crucial concept of FINANCIAL INFORMATION EXCHANGE (FIX) protocol which essentially provides it Recovery and replay capability and ensures that no message will lose throughout transmission or conversation. In FINANCIAL INFORMATION EXCHANGE (FIX) protocol each message contains a unique sequence number defined in tag 34. Logically we are able to divide collection quantity into two Incoming and Outgoing Sequence wide variety.
Incoming collection quantity is the range any FIX Engine looking ahead to from Counter Party and Outgoing collection variety is the quantity any FIX engine is sending to Counter Party.
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Question 6. What Happens If Client Connects With Sequence No Higher Than Expected?
Answer :
If Client FIX Engine connects to Broker Fix Engine with Sequence Number better than anticipated (e.G. Broking is expecting Sequence Number = 10 and Client is sending = 15). As per FINANCIAL INFORMATION EXCHANGE (FIX) protocol Broker will accept the connection and issue a Resend Request (MsgType=2) asking Client to resend missing messages (from messages 10 -15) , Now Client can both replay those messages or can issue a Gap Fill Message (MsgType=four as in keeping with FINANCIAL INFORMATION EXCHANGE (FIX) protocol) in case replaying those messages doesn't make any experience (may be admin messages e.G. Heartbeat and many others).
Question 7. What Do You Mean By Funari Order Type?
Answer :
Funari may be very famous Order type generally used in Japanese and Korean market , its denoted by OrdType=I in FIX protocol , In Funari Order kind Order will stay in Market as Limit Order but throughout Market Closing length , if there may be any unexecuted quantity then it will become a Market Order.
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Question 8. What Do You Mean By Odd Lot And Board Lot?
Answer :
In Exchanges each Security traded in lot e.G. Lot of one, 10 or a hundred or one thousand. These are known as Board lots and while putting order customers want to send Order amount multiple of Board lot. If Clients sends any Order which isn't a multiple of Board lot then its called Odd lot.
Question nine. What Happens If Client Connects With Sequence No Lower Than Expected?
Answer :
If Client FIX engine connects to dealer FIX engine with Sequence No decrease than anticipated than dealer FIX engine will disconnect the connection. As according to FINANCIAL INFORMATION EXCHANGE (FIX) protocol consumer then may attempt by way of growing its sequence Number until dealer accepts its connection.
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Question 10. What Is The Difference Between Possdup And Poss Resend?
Answer :
As consistent with FINANCIAL INFORMATION EXCHANGE (FIX) protocol PossDupFlag (tag forty three): shows possible retransmission of message with this series quantity valid price:
Y = Possible reproduction
N = Original transmission
PossResend (tag 97): Indicates that message may additionally include records that has been sent underneath some other sequence number.
Valid Values:
Y=Possible resend
N=Original transmission
In Simple phrases PossDup is when you are resending a message and PossResend is whilst you are sending a brand new message with equal data you have already despatched in a previous message.
Let’s do not forget beneath use case for clarity with PossDup, you may ship out an order with Sequence quantity of 10. Then you send another message with some of eleven. For a few cause the counter celebration did now not obtain message 10 and could request a resend. You will then resend this identical message with a sequence number of 10 marking tag forty three=Y.
In case of PossResend, you could send out an order, once more let's consider with a sequence variety of 10. After 5 seconds, you haven't gotten an acknowledgement. So you can determine to attempt once more due to the fact perhaps the counterparty did not receive or were given the first time. So you'll send out a message with a exclusive sequence variety like eleven, which will incorporate all of the same information message variety 10 did. You will then mark it as a PossResend. So that is announcing you have got already sent this order before, which Counter birthday celebration can also or may not have processed.
While coping with of PossDup is dictated by way of session good judgment, PossResend are dictated with the aid of business good judgment (e.G. Reject an Order if ClOrdID is duplicate etc). This is due to the fact it's miles as much as the commercial enterprise layer to decide if a selected business object has been processed (by using checking the order identification for example).
Question eleven. You Have Bought A Stock At Inr one hundred And Want To Sell It As Soon As It Hits Inr a hundred and ten. If You Want To Guarantee That Your Sell Order Is Filled, Which Of The Following Types Of Order Should You Place?
Answer :
In this situation you can not use restrict order due to the fact restriction order doesn't assure execution if there are similar LIMIT order exists then it's going to look ahead to its flip. You can not both use Market Order because it failed to come up with Price assure and will fill on cutting-edge fee. Solution is to apply "STOP" order with prevent price 110, as soon as price reaches a hundred and ten it will get set off but in case of excessive volatility it may fill greater or much less a hundred and ten if price is transferring very fast.
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Question 12. Which Of The Following Orders Would Be Automatically Canceled If Not Executed Immediately?
Answer :
Fill or Kill (FOK) and Immediate or Cancel (IOC) orders are forms of order which both accomplished right away or get cancelled with the aid of change. TimeInForce (tag 59) in FINANCIAL INFORMATION EXCHANGE (FIX) protocol is used to mark an order as FOK or IOC.
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Question thirteen. What Is The Difference Between Fok Order And Ioc Order?
Answer :
Main distinction among FOK and IOC Order is that FOK needs full execution of order i.E. All quantity has to be crammed at the same time as IOC order is prepared to simply accept partial fills additionally.
Question 14. What Is Stp (straight Through Processing) Systems?
Answer :
STP is abbreviation of "Straight thru processing" which denotes trading systems which requires either no guide interplay or some manual interaction for entire exchange lifestyles cycle e.G. The whole thing after submission of Order e.G. Processing, execution, booking, allocation, settlement happens automatically.
NON STP structures require manual interplay on a few levels of alternate existence cycle e.G. Reserving or settlement.
