🚨 High-Frequency Trading on Ham Bands? A Looming Threat to Radio — and Financial Stability
Would faster high-frequency trading (HFT) really make global markets more efficient — or are we flirting with the next financial contagion?
Let’s dig into both sides of this complex issue, but first, we need to understand how we even got here.
📡 The Shortwave Modernization Coalition: Trading Over the Airwaves
Last year, a consortium of hedge funds, market makers, and telecom service providers calling themselves the Shortwave Modernization Coalition (SMC) petitioned the Federal Communications Commission (FCC) for access to parts of the shortwave radio spectrum.
Their goal? To use these long-range frequencies — the same general bands that ham radio operators have used for nearly a century — to send trading data between major financial centers faster than fiber optics or satellite links can.
The proposal sounds cutting-edge. But to amateur radio operators, shortwave enthusiasts, and engineers who understand how fragile and shared these frequencies are, it sounds more like a hostile takeover of a public resource.
The frequencies in question — roughly 2 to 25 MHz — are not empty space. They’re the lifeblood of international amateur radio, emergency communications, maritime operations, and aviation weather. They’re also one of the few technologies that can operate independently of the internet or cell networks, often serving as the last line of communication when disasters strike.
Yet the SMC’s slick, professionally financed proposal argues that their HFT transmissions won’t interfere with current users — a claim that many in the amateur radio community view as technically unrealistic.
If approved, this could permanently alter the ham radio spectrum forever!
The Author Ray Higgins W2RE on one of his five towers in Jonesport, Maine
⚖️ Efficiency vs. Contagion: A Risk Manager’s Dilemma
The SMC argues that using shortwave bands will make markets more “efficient” by reducing transmission times between exchanges — say, from Chicago to London — by a few milliseconds. But as author Richard Bookstaber warned in A Demon of Our Own Design, greater speed and “tighter coupling” in financial systems can actually make crises spread faster.
Think of a tightly coupled assembly line. If one worker’s station breaks, the entire system stops instantly. In loosely coupled systems, there’s some breathing room — delays and buffers that keep problems local.
In markets, those buffers are milliseconds.
By slashing communication delays between exchanges from a tenth of a second to a twentieth, we’re essentially removing the shock absorbers that give algorithms time to catch errors before they cascade through global systems.
Faster isn’t always safer — especially when trillions of dollars move at the speed of light.
⚠️ Technical & Security Risks
Beyond financial contagion, the shortwave proposal faces serious technical and security flaws:
Low Bandwidth: These frequencies can’t transmit complex trading data, only small signals or pings.
Unreliability: Shortwave is notoriously prone to noise, fading, and interference from natural and manmade sources — including sunspots and thunderstorms.
Interception Risk: Shortwave is inherently open air. Anyone with a receiver can listen in, and due to bandwidth limits, robust encryption is nearly impossible.
In other words, hedge funds would be broadcasting sensitive trading signals — potentially worth billions — across the globe on frequencies that hobbyists and even pirates can tune into with a $50 radio.
It’s a cybersecurity nightmare disguised as innovation.
🧠Why This Matters for Amateur Radio
For nearly 100 years, amateur radio operators (hams) have served as innovators, emergency communicators, and educators. These same HF bands are used daily by tens of thousands of licensed operators — including during natural disasters when power and the internet fail.
If the FCC allows the SMC to occupy these frequencies, interference could make global ham communication unreliable — especially across long-distance “DX” paths that depend on clear, quiet bands.
Imagine a sudden, high-powered burst from a trading station blanketing signals during a hurricane net or search-and-rescue coordination. Unlike commercial telecom, amateur radio doesn’t have the luxury of private, shielded channels — it relies on spectrum sharing and cooperation.
Once financial interests enter the picture, that balance is gone forever.
The Author Ham Radio Shack.
🚀 The Race for Milliseconds: HFT’s Never-Ending Arms Race
The SMC’s push is just the latest chapter in a decades-long obsession with speed.
In the early days of HFT, firms fought for microseconds by placing servers closer to stock exchange computers. After 2008, the race went global — connecting Chicago to Frankfurt, London, and Shanghai in milliseconds.
Each incremental leap costs millions — new microwave towers, optimized fiber routes, now possibly shortwave transmitters.
But here’s the irony: after all this innovation, the benefit to ordinary investors is negligible. Faster trading mostly shifts profits between firms while amplifying systemic risk.
And now, this race threatens to spill over into public radio spectrum — one of the few remaining frontiers where commercial greed hasn’t drowned out community purpose.
🧨 The Bottom Line
There are three ways this could go:
The Optimist’s View: A few HFT firms gain an edge, and markets become marginally more efficient.
The Pragmatist’s View: Liquidity improves slightly, but volatility and costs for investors rise.
The Realist’s View: The next flash crash or algorithmic error spreads globally — in milliseconds.
Meanwhile, ham radio operators lose vital communication space, and the public loses a trusted, open, and resilient technology.
The FCC must consider not just the economic implications but the public good. Once these frequencies are commercialized, there’s no going back.
In the pursuit of milliseconds, we might just jam the very frequencies that have connected the world for generations — and risk destabilizing the markets those traders are trying to speed up.
Written by Ray Higgins, W2RE — Ham Radio Pioneer, Entrepreneur, and Founder of RemoteHamRadio.com, connecting operators worldwide through cutting-edge technology.
