Can someone use GPS Jamming or Spoofing to game the markets of the world in such a way that their HFT shop would have a competitive advantage? We weren't sure so we asked an expert, John Fischer the CTO of Spectracom, and leader in the field of time distribution. John said “Jamming is easy. Spoofing is hard. It can be done, but you have to be smarter than the average bear. It’s like walking on a tight rope across Niagara Falls. It can be done, but not by just anyone. And we protect against jamming with our holdover oscillator.” What brought jamming into the news recently was testimony by Dr. Todd Humphreys on July 18, 2012 before the House Subcommittee on Homeland Security on how insecure the civilian GPS system is, and that it shouldn't be blindly trusted. Last week we were asked by a reporter about this topic. In preparing an answer we learned a number of things we think should be shared. First lets clarify what we mean by GPS jamming and spoofing.
There are two satellite GPS signals that are commonly available: the insecure consumer signal and the highly encrypted military signal. This whole entry will ONLY cover the consumer signal. Jamming actually isn't that difficult, you just need to known the frequency range of the GPS signal and reproduce one that is substantially stronger than that received from these satellites. Since the rings of GPS satellites circling the earth are in orbits 12,600 miles overhead, a local jammer hidden in someone's pocket could easily overpower something so distant. A Google search today revealed that for as little as $32 US you can buy a GPS jammer, and the more you spend the better the jammer.
The second concept is Spoofing. Here one transmits a counterfeit signal where the time contained within the data has been artificially altered. Dr. Humphrey's team at UT Austin with a budget of under $1,000 US successfully spoofed a GPS signal sufficiently enough to PWN (take control) a UAV helicopter drone. Dr. Humphreys used this demo to point out that the civilian band of the GPS signal is transmitted in the clear and should not be blindly trusted, and in-fact if you're intelligent enough you could replace the signal with your own. His team altered the signal sufficiently enough to drive the drone into the dirt. Now note this was a drone using the consumer GPS signal (not the military one).
In HFT most shops use a GPS signal provided by the exchange. They then bring this in and connect it to their own clock. The signal from this clock is then distributed to all their trading systems. The clock here is the key. What Dr. Humphrey's didn't address in his testimony (section 4.3 Banking and Finance) is that these clocks add a layer of hardware which has built in checks and balances. In the presence of a lost or jammed GPS signal these clocks by design go into free-run mode where their own internally oscillator (often Rubidium based) takes over to provide accurate time. These internal oscillators typically drift less than one microsecond a week.
By design these clocks have two defenses against spoofing. Both defenses are built on the clock's own internally reference oscillator. Dr. Humphrey's implied that these clocks typically drift 1/10 of a microsecond per second, which I'm told is true for a software only based clocking system, this means potentially 60,000 microseconds a week. Contrast this to the internal hardware oscillator in these clocks which drift only 1 microsecond a week, and the problem Dr. Humphrey's outlines disappears. First if the GPS signals don't align, within predefined tolerances, to the internal reference oscillator they are ignored and the clock goes into free-run mode. This would be a defense against an attempt to dramatically shift time forwards or backwards. Second if the GPS signals were altered very subtly over time I'm told that it is possible that this change might not be detected. The change would have to be made extremely slowly over a long period of time, but it is possible although unlikely. Suppose someone were slowing down GPS time, as these changes are compounded they could eventually exceed a threshold when a periodic check is made that compares them to the internal oscillator and once again the clock would go into free-run mode. Although if the change were small enough it could continue to slip through.
So the presence of an accurate oscillator in ones clock, combined with a rigorous internal process for comparing that oscillator to both the inbound GPS signals and periodically double checking over time removes the issue of blindly trusting the insecure consumer GPS system from our market trading systems.