Financial traders rely heavily on computer financial simulations for making buying and selling decisions. Specifically, "Monte Carlo" simulations are used to assess risk and simulate prices for a wide range of financial instruments. These simulations also can be used in corporate finance and for portfolio management.
But in a digital world where other industries routinely leverage real-time data, financial traders are working with the digital equivalent of the Pony Express. That's because Monte Carlo simulations involve such an insanely large number of complex calculations that they consume more time and computational resources than a 14-team, two-quarterback online fantasy football league with Superflex position.
Consequently, financial calculations using Monte Carlo methods typically are made once a day. While that might be fine in the relatively tranquil bond market, traders trying to navigate more volatile markets are at a disadvantage because they must rely on old data. If only there were a way to accelerate Monte Carlo simulations for the benefit of our lamentably ladened financial traders!
Soon there will be, according to financial services giant Goldman Sachs and QC Ware, a quantum-as-a-service provider that develops applications to run on near-term quantum-computing hardware. Researchers for the two partners reportedly have designed new quantum algorithms for running Monte Carlo simulations on near-term quantum hardware expected to be available in five to 10 years.
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