
Companies Pitch Shortwave Radio to Shave Milliseconds Off Trades - lightlyused
https://www.bloomberg.com/news/articles/2020-06-17/companies-pitch-shortwave-radio-to-shave-milliseconds-off-trades
======
cameldrv
This has been going on for several years at least. These are some pretty good
articles from some amateur sleuths:

[https://sniperinmahwah.wordpress.com/2018/05/07/shortwave-
tr...](https://sniperinmahwah.wordpress.com/2018/05/07/shortwave-trading-part-
i-the-west-chicago-tower-mystery/)

[https://sniperinmahwah.wordpress.com/2018/06/07/shortwave-
tr...](https://sniperinmahwah.wordpress.com/2018/06/07/shortwave-trading-part-
ii-faq-and-other-chicago-area-sites/)

[https://sniperinmahwah.wordpress.com/2018/07/13/shortwave-
tr...](https://sniperinmahwah.wordpress.com/2018/07/13/shortwave-trading-part-
iii-fourth-chicago-site-east-coast-patent-regulation-and-farmer-kevin-
mystery/)

[https://sniperinmahwah.wordpress.com/2018/07/16/shortwave-
tr...](https://sniperinmahwah.wordpress.com/2018/07/16/shortwave-trading-part-
iv-sleuthing-examples-research-tools-techniques-deputies-wanted/)

~~~
dang
A big 2018 thread about those:
[https://news.ycombinator.com/item?id=17028892](https://news.ycombinator.com/item?id=17028892)

~~~
hef19898
I can recommend the book "Flashboys". It goes into the details why these
milliseconds are important, and what role radio plays.

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sargun
I remain convinced that this is Starlink's short-term customer if their
promises are true. They are doing transmission via optical as the crow flies.
If they're doing O-O, or even low latency O-E-O, they can beat transatlantic
fiber. For HFT houses, that's potentially a major edge.

~~~
modeless
Starlink latency would be worse than shortwave. The advantage would be
bandwidth, but I doubt that high bandwidth is really helpful for this
application, especially if you have to give up a tiny bit of latency for it.
After all, you can already have all the bandwidth you want with only slightly
higher latency.

~~~
alexpil
starlink latency could be faster than shortwave, once full gen2 constellation
launches, and if starlink decides to care about this industry.

...disclosure: i'm the first one to build NY-Chi microwave, and Chi-Lon
shortwave.

~~~
modeless
Cool! How do you figure? Doesn't shortwave take the great circle path, at
lower altitude, making the path shorter?

~~~
alexpil
gen2 constellation is at 350km agl shortwave f-layer is at 200-400km agl
depending on space weather

difference is not that big

~~~
modeless
Sure, but it seems to me like the Starlink path will still be longer in almost
all cases unless you're incredibly lucky and the satellites line up exactly
along the path for a few seconds. And Starlink could have additional delays
related to routing and possibly TDMA. What kind of latency issues need to be
considered with shortwave?

~~~
alexpil
a single orbital plane at 53' contains 7028 satellites (out of 40k total, but
let's take one orbital plane)

basic math, "satellite density" or "average distance between satellites" if
they were just at random position is ~200km (napkin math, might be off).

~~~
sargun
Some folks wrote a paper based on the proposed constellation:
[https://dl.acm.org/doi/10.1145/3286062.3286075](https://dl.acm.org/doi/10.1145/3286062.3286075)

The paper actually talks about trading: > Already there are new private
microwave relay links between New York and Chicago[11], London and
Frankfurt[1], and London and Paris. These links have relatively low capacity
compared to fiber, but are of high enough value to the finance industry to be
worth building new low latency links

In their paper, they say NYC / LON RTT will be between 58 and 66 ms -- this
isn't much better than fiber. On the other hand, London to Joburg -- starlink
has an advantage.

~~~
alexpil
That paper is based on gen1 constellation, and predates gen2 (350km)
announcement.

------
sgt101
If I was regulating the markets I would introduce a random ~100ms delay into
all transactions.

~~~
VMG
The company who has the best latency would still beat the competitors.

~~~
gspr
Are you sure about that? They would on average perhaps be a slight bit faster,
but if the randomized delays are an order of magnitude larger than the
latency, they may not be able to do anything useful with that advantage.

~~~
bryanrasmussen
wouldn't it be like this?

If the delays are randomized then you have as good as chance of getting them
as your competitors. On delayed times you will have a bad chance of winning,
but in comparison to others with the same delays your latency beats theirs, on
non-delayed times your latency beats non-delayed competitors and really beats
delayed competitors.

Thus in the end the best latency should win biggest on non-delayed trades, and
on delayed trades lose least.

~~~
gspr
Unless that uncertainty now means that your time and resources is best spent
elsewhere than shaving ms off your latency.

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walrus01
It's pretty hard to hide a yagi-uda antenna capable of transoceanic distance
communications. The data rates are MUCH lower than what's possible by fiber
and microwave, as pointed out in the article.

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ncmncm
Now they need a bidding market to determine who gets to choose whether to send
a 1 or 0 in the next available slot.

And another market for which bits to jam and prevent either value from getting
through.

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musicale
It's weird that we've set up a stock market for machines rather than humans,
where ever-faster bots interpose themselves between slightly slower bots, all
the way up to the original buyer and seller, who are probably bots as well.

~~~
rvense
This all sounds so perverse to me. There are so many obviously brilliant
people working on these things. Why aren't they doing something productive
with their time? Fighting climate change, educating uneducated, feeding the
unfed. All the energy and rare and bloody minerals that are being put into
these radios, all the drinking water that will be forever tainted after having
been used to produce the semiconductors needed for all this... was it really
the best place to use it? To make the roulette wheel run a little faster? I
don't understand it.

~~~
Erlich_Bachman
You won't like it, but the there is a sensible answer for this. Despite you
not liking the stock (and other financial) markets, they do perform a useful
and needed task (price discovery, reallocation of resources, reallocation and
focusing of human brainpower, reallocation of capital, allowing for investment
(allocation of collected capital and resources in the present for future
projects, so that they can be achieved faster, and thus provide overall better
output of the system)), and even speculation is also an important part of that
task.

It is not needless greed (as popularized by some movies and pop culture), it
is an engine of the capitalist civilisation, which has so far produced far
more results (even in less obvious terms like allowing for least poverty in
the world than any other time in history, because the benefits of a well-
functiouning society do evidently trickle down to the the little guy, even if
the most of it is collected at the top) than any other.

There is indeed some meaningless speculation in it, just like how there is
corruption in all of human systems, and just how in every ecosystem there are
a number of parasites, but they are there because the underlying system
(capitalism) is meaningful and produces value for society.

> feeding the unfed

They do feed the unfed. The capitalist system has been able to reduce world
poverty by far far more than any other system in history. Look at the stats.
And well-functioning capital, labor, idea and resource circulation markets are
at the very heart of that system.

~~~
rvense
> And well-functioning capital, labor, idea and resource circulation markets
> are at the very heart of that system.

Sure. But I'd question whether high-frequency trading is a necessary component
of that, as opposed to regular-frequency trading. Same as I'd question whether
things like collateralized debt obligations and interest-free loans were good
for the housing market.

"Capitalist civilization" has changed in a number of ways since Reagan and
Thatcher, just in its legal framework, compared to the thirty years before and
I don't think it's obvious at all that we are better off in the developed
world than we were in the fifties and sixties when things were more regulated.

When I look at stats for things like wage disparities, and the amount of money
poured into marketing (demand generation), and the amount of frivolous
products that the capitalist economy produces because it must by its nature
constantly expand production, I quite honestly don't see efficiency and I
certainly don't see reason.

~~~
icelancer
>> When I look at stats for things like wage disparities, and the amount of
money poured into marketing (demand generation), and the amount of frivolous
products that the capitalist economy produces because it must by its nature
constantly expand production, I quite honestly don't see efficiency and I
certainly don't see reason.

Have you considered its alternatives are not much better, if at all?

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im3w1l
So if glass slows the signal down, would it be possible to use a hollow fiber?

~~~
toomuchtodo
Microwave is traditionally used to reduce latency caused by fiber’s refractive
index. I suppose you could bury waveguides, but an air interface works just as
well (besides the occasional weather; better to be fast most of the time).

[https://arstechnica.com/information-
technology/2016/11/priva...](https://arstechnica.com/information-
technology/2016/11/private-microwave-networks-financial-hft/)

~~~
selectodude
I can assure you, that link already exists several times over. There are
dozens of links between Aurora and 350 E Cermak, and dozens more between 350 E
Cermak and Cateret, NJ. There's even an entire ISP based off the lowest
latency link between Chicago and New York.

[https://en.wikipedia.org/wiki/Spread_Networks](https://en.wikipedia.org/wiki/Spread_Networks)

~~~
acjohnson55
What's in Aurora? And why West Chicago in the original article?

Amusingly, I grew up 2 towns over from Aurora and live 3 towns from Carteret
now.

~~~
jleahy
The CME datacenter is in Aurora, and the ICE datacenter is in Chicago proper.

~~~
acjohnson55
Ah, cool. Is there a significant operation in West Chicago, too? From the
article, I was still confused by why a shortwave tower would be located there.
West Chicago is close to Aurora, I suppose, but if it's for CME data center,
why not put the tower in Aurora?

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neonate
[https://archive.vn/80BAE](https://archive.vn/80BAE)

------
oizin
Interview with the CEO of Raft Technologies, a company offering this service:
[https://chatwithtraders.com/ep-197-haim-ben-
ami/](https://chatwithtraders.com/ep-197-haim-ben-ami/)

