It all started over ten years ago when we had our first customer, proprietary trading firm, who wanted to be a market maker of options on the Polish stock exchange and planned to make whole process automated. We called each and every brokerage house to connect our customer to their brokerage system or give us API. Nobody had technical possibilities to do that. It was a few years too early, the market in Poland was not ready for algorithmic trading yet. But we could not leave our first customer with nothing. The only possibility left was to connect directly to broker servers emulating customers HTTP requests. This way the brokerage system thought we were just an usual retail client, but we were able to automate whole communication. It was cumbersome, more like hacking than integration but it was the only way through. Please do not try this at home. Times have changed.
Wild wild west
Next big task was to test the system. The logic of market making, option pricing and managing portfolio of options have a lot of math behind and there was a lot to test. After testing with our simulators, we had to finally test it on production. Our founders didn’t want to hear about risking customers money, so we used our own. The idea was crazy, because system for market making from its nature performs hundreds of operations per second and requires a lot of cash. In a few days we had opened over a thousand of option positions in more than 20 instruments. The funny thing was that the broker called us offering special discounts, because we became their biggest retail investor on option market. We ended with positions we didn’t need, but one thing was certain – the system was working. Times has changed, we don’t need to test the our software with our money any more, but we’ve kept fanatic approach to testing up till now. It’s extremely important in financial technology business.
Finally our customer was connected and could try the system. They said they felt like everybody around was hunting with bows and we gave them a machine gun. We literally saw and felt we have made the difference. That incredible feeling comes back from time to time for instance when we help a customer build an algorithm that exploits some inefficiencies on the market which no one else sees. It’s not longer that easy, brute engineering force is not enough any more, but at the end of the day it’s always about the right idea.
These were the old times and our first system. I wouldn’t recommend anybody doing connectivity that way, especially market makers :). Now our market is mature, a few years ago exchange changed the system to NYSE Euronext. Brokerage houses, investment funds, surveillance are on highest professional level. But tools for algorithmic trading are not widely used, therefore customers who work with us still have a room to outperform.
What’s interesting is that our technology from the old times, is still in use, although in different domain. We use it internally to automate test execution of our systems. Day and night every change in code of any of our systems triggers thousands of automatic test, that emulate human user behaviour to perform every possible action and automatically check the results. With that approach we can constantly evolve our technology and are 100% sure that it’s always working. Comparing to big vendors on the market, that have old, legacy systems with millions lines of code, for millions of Euro (one Euro for every line, probably), and are afraid to change a single line of code because it can break the whole system. As you can often hear backstage – don’t touch the running system. We are different. We are agile and nimble. In a few weeks we can rewrite the core of our system to save a few microseconds here and there, and at each and every moment be sure it’s working properly. That’s agile.
We have grown up from our infancy times. Our technology, processes and infrastructure are mature. We make projects for financial institutions all over Europe. We have build our own Algorithmic Trading Platform which is a bleeding edge software for institutional investors. We have great team of developers, testers and quants which helps our customers to build their own solutions. We are also helping other fintech startups in software development because we can add great value to their business. As fintech company we perfectly understand their challenges.
We are different than other software houses because we concentrate only on financial technologies. Therefore we are building software that supports customers business. That’s what software is for. It’s impossible to do that for all industries at once. To build software that helps customer in his business you have to thoroughly understand that business.
IT Corner Association
Empirica is founding member of IT Corner Association, which at this moment groups over 30 companies related with IT sector and software development. IT Corner aims at supporting the development of local enterprises, tightening the cooperation among small and medium size high-tech companies and developing project and product synergies among its members.