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Quantum computing and trading

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  #1 (permalink)
 AllSeeker 
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I was curious since just recently India announced its first quantum computing lab in cooperation with AWS (Amazon web services) and I was reading about it.

What are the implications if this is used for trading? Where and how do we see markets getting effected by this new level of computing power being introduced to it?

Or does it make no difference at all?


Please note that I don't have technical background in this so my question is vague, please feel free to expand the topic.

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geistflow
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I have no background in this area but your post also made me wonder what the implications might be. Unfortunately I couldn't find anything really clear yet on the implications for trading. The only article I could find which somewhat provides ideas is "Quantum computing for finance: Overview and prospects" https://www.sciencedirect.com/science/article/pii/S2405428318300571 . There's a section 3.1 on trading and 3.2 on arbitrage but the math is beyond me.

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 AllSeeker 
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geistflow View Post
I have no background in this area but your post also made me wonder what the implications might be. Unfortunately I couldn't find anything really clear yet on the implications for trading. The only article I could find which somewhat provides ideas is "Quantum computing for finance: Overview and prospects" https://www.sciencedirect.com/science/article/pii/S2405428318300571 . There's a section 3.1 on trading and 3.2 on arbitrage but the math is beyond me.

Thank you for sharing that article link. You are the only respondent here so its like drop of water in the desert

That article also went above my head though, so that's that

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userque
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If you paid me millions to research quantum computing, I would, even if I believed it to be a pipe dream.

Simply, I don't buy it. The whole show started in the 80's, yet, we still have no truly verifiable quantum computer capable of doing massive, abnormally fast, calculations.

Even if they will someday exist? Would they be able to predict random events? Lottery numbers? No.

There is randomness within the markets. Perhaps this is why, for example, a current algo system can only forecast with 70% accuracy, rather than 100%. A super "quantum" computer may be able to do no better, if the inaccurate forecasts are due to randomness etc.

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 AllSeeker 
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userque View Post
If you paid me millions to research quantum computing, I would, even if I believed it to be a pipe dream.

Simply, I don't buy it. The whole show started in the 80's, yet, we still have no truly verifiable quantum computer capable of doing massive, abnormally fast, calculations.

Even if they will someday exist? Would they be able to predict random events? Lottery numbers? No.

There is randomness within the markets. Perhaps this is why, for example, a current algo system can only forecast with 70% accuracy, rather than 100%. A super "quantum" computer may be able to do no better, if the inaccurate forecasts are due to randomness etc.

Agreed, I've similar doubts and hence wondering what it really means and how it may change things, if at all.

Just a curious cat. But I'll say this though, advent of computers and eventually higher powered computers did effect the trading world, in fact its kind of integral part of how market works now and I would imagine even stronger computing system should have similar or magnified impact. As traders, its worth keeping an eye out on it

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 SBtrader82 
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userque View Post
If you paid me millions to research quantum computing, I would, even if I believed it to be a pipe dream.

Simply, I don't buy it. The whole show started in the 80's, yet, we still have no truly verifiable quantum computer capable of doing massive, abnormally fast, calculations.

Even if they will someday exist? Would they be able to predict random events? Lottery numbers? No.

There is randomness within the markets. Perhaps this is why, for example, a current algo system can only forecast with 70% accuracy, rather than 100%. A super "quantum" computer may be able to do no better, if the inaccurate forecasts are due to randomness etc.

I think the impact on markets would be minimal, it might have impact on cryptography where the problems are more defined.
However markets are moved by emotions of people, unless of course everything will be moved by computers only.
So market are a place of emotions and there is no "defined" math problem to which apply the high computational power of quantum computing.



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 AllSeeker 
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SBtrader82 View Post
I think the impact on markets would be minimal, it might have impact on cryptography where the problems are more defined.
However markets are moved by emotions of people, unless of course everything will be moved by computers only.
So market are a place of emotions and there is no "defined" math problem to which apply the high computational power of quantum computing.



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I think scope of discussion here is larger than that, its not about solving markets with maths tbh, even now there are traders who are willing to pay extra to be little closer to exchange servers or have a direct lease line. I'm not kidding, if I'm willing to pay enough I can even book a desk in my national stock exchange to just trade my own funds, by myself in square cubical.


Having faster computers or higher capacity ones or cloud systems should be able to open much more doors, so expanding topic from just "predictive" efficiency of computers. Another example would be ability to have full functionality of terminals like bloombergs on much lower tier traders, I've worked on Reuters before when I was working and retail traders usually don't look beyond just charting platforms with bunch of fancy indicators, but the so called big boys do invest money and time in doing data crunching of all sorts, I remember data crunching was so stressful for our system that it would often pause for few seconds.lol

Now I'm not a math guy, so I've no idea, but I can't help but wonder how things will go ones the guys know how to utilize this new technology to its full potential.

Maybe it will just make trading more complicated, maybe just faster, maybe there will be something new trending in place of fancy orderflows or probably some more advanced variation. This is just my speculation and more so probably just my imagination

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 SBtrader82 
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LastDino View Post
I think scope of discussion here is larger than that, its not about solving markets with maths tbh, even now there are traders who are willing to pay extra to be little closer to exchange servers or have a direct lease line. I'm not kidding, if I'm willing to pay enough I can even book a desk in my national stock exchange to just trade my own funds, by myself in square cubical.


Having faster computers or higher capacity ones or cloud systems should be able to open much more doors, so expanding topic from just "predictive" efficiency of computers. Another example would be ability to have full functionality of terminals like bloombergs on much lower tier traders, I've worked on Reuters before when I was working and retail traders usually don't look beyond just charting platforms with bunch of fancy indicators, but the so called big boys do invest money and time in doing data crunching of all sorts, I remember data crunching was so stressful for our system that it would often pause for few seconds.lol

Now I'm not a math guy, so I've no idea, but I can't help but wonder how things will go ones the guys know how to utilize this new technology to its full potential.

Maybe it will just make trading more complicated, maybe just faster, maybe there will be something new trending in place of fancy orderflows or probably some more advanced variation. This is just my speculation and more so probably just my imagination

Yes but I think computers nowadays are already very powerful to do data crunching. Quantum computer will offer a leap in computational power...anyway it's just my opinion, I have no idea of how trading works at the institutional level

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 AllSeeker 
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SBtrader82 View Post
Yes but I think computers nowadays are already very powerful to do data crunching. Quantum computer will offer a leap in computational power...anyway it's just my opinion, I have no idea of how trading works at the institutional level

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Indeed, from our current perspective, yes.

That reminded me of a story from Trading Saradins, I think Linda was talking there about how she transitioned from floor trader to computer one and marveled at the power her pixelated charting software with some modified indicators and her then fast internet had.

Anyways, its almost morning here, so its time for me to sleep lmao

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 SMCJB 
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When I backtest trading systems it's easy to see that 'stuff' that used to work now doesn't. 'Something' obviously changed. I am a subscriber to the belief that what changed is computers. Initially a few dedicated people had an advantage over others. Then a lot of people could use computers to refine/improve/optimize their trading/investing. Now almost anybody with a computer can quickly test an almost infinite amount of trading rules and the advanced users can parse the data in a way others can not even dream of. I believe this has made automated trading more and more difficult. I know nothing about Quantum Computing but have to think that any improvement in computing power is just going to push this change further and faster. When we talk about computers (or robots) replacing humans, I think trading and finance are one of the area's that is a prime target for automation. More advanced computation hastens the inevitable to me!

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