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How to Minimize Your Liquidity Risk with FIX API?

Blog | 03 Dec 2020 10:51/AM GMT

Instability in liquidity level is known as liquidity risk and according to Investopedia, it happens when an individual investor, business, or financial institution cannot meet its short-term debt obligations. 

Due to a lack of buyers or an inefficient market, the investor or entity might not be able to turn an asset into cash without giving up capital and profits. 

In the financial market, liquidity risk is another form of risk that traders may need to be aware of before they create a strategy that employs illiquid assets. 

As an institutional participant, you can manage liquidity risk to avoid the problems it brings. 

Integrating a robust Application Programming Interface (API) into the trading operations infrastructure is a widely sought-after way to improve market communications and enhance trade performance. 

When it comes to APIs in the financial field, the Financial Information Exchange (FIX) protocol has become the international language of the financial markets for front-office communications. 

 

What is FIX API? 

According to Techopedia, FIX API is a set of clearly defined rules and methods designed specifically for the electronic transfer of financial data. In terms of the industry, it is an electronic communications protocol for real-time information exchange for financial securities transactions. 

 

How FIX API helps to minimize the liquidity risk? 

1) Seamlessly connection 

FIX API is a way to connect directly with a particular Liquidity Provider or aggregator. Besides, FIX API is compatible with a vast network of brokerages and supported software trading platforms. 

At Doo Clearing, the FIX API function is to connect seamlessly to an aggregator or by chosen, or to an MT4 or MT5 bridge provider. 

 

2) Ultra-low latency 

The FIX API is a valuable tool for anyone interested in robust trade performance and reduced latency. 

For Doo Clearing, its technology and pricing solutions ensure that traders experience all the benefits of an aggregative, low latency trading environment. 

Our clients experience ultra-low latency with our Equinix Data Centre in Hong Kong, London, New York, Singapore, and Tokyo. The highest level of Tier 4 infrastructure stability and easy cross-connectivity to major international financial firms. 

 

3) Direct Access Market (DMA) 

As a standardized protocol, FIX API works efficiently in all types of asset classes, including forex, CFDs, commodities, and equities. This ensures widespread acceptance and quick and easy setups. The system is also highly scalable, allowing rapid transfer of vast quantities of trade information. 

Through in-depth cooperation with large liquidity providers, clearing banks, futures companies, and direct access to the market using the DMA model, Doo Clearing can provide customized liquidity clearing solutions for different types of professional clients to ensure the best trade execution environment. The industry standard provides an easy interface for any brokerage to access direct liquidity from Doo Clearing. 

 

4) Flexible to develop your own Algorithm programs 

Doo Clearing offers algorithmic and high-frequency traders in the best trading environment. 

Doo Clearing enables direct access to consistent, reliable bank and non-bank price liquidity covering a wide range of instruments. 

The financial marketplace is a highly competitive space, where technological adeptness offers a huge edge. 

For more information, please contact our expert support team: 

London Office 

Email: [email protected] 

Website: www.dooclearing.co.uk 

 

Hong Kong Office 

Email: [email protected] 

Website: www.dooclearing.com 

 

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