The experiment delivered “strong improvements” in finding hidden pricing signals in the European corporate bond market.
Global bank HSBC and a team from IT systems giant IBM say that they have achieved a “ground-breaking” achievement in bond trading via quantum computing, which IBM says is a meeting of computer science and engineering “that harnesses the unique qualities of quantum mechanics to solve problems” in ways superior to classical computing.
“In this case, IBM Heron was able to augment classical computing workflows to better unravel hidden pricing signals in noisy market data than standard, classical-only approaches in use by HSBC, resulting in strong improvements in the bond trading process,” according to the announcement. Heron is IBM’s latest quantum processor.
“This is a ground-breaking world-first in bond trading. It means we now have a tangible example of how today’s quantum computers could solve a real-world business problem at scale and offer a competitive edge, which will only continue to grow as quantum computers advance,” says Philip Intallura, HSBC group head of quantum technologies, in a prepared statement.
HSBC and IBM investigated how “quantum computers could optimize requests for quote in over-the-counter markets, where financial assets such as bonds are traded between two parties without a centralized exchange or broker,” officials explain. “In this process, algorithmic strategies and statistical models estimate how likely a trade is to be filled at a quoted price. The teams validated real and production-scale trading data on multiple IBM quantum computers to predict the probability of winning customer inquiries in the European corporate bond market.”
This approach “utilized quantum and classical computing resources to deliver up to a 34 percent improvement in predicting how likely a trade would be filled at a quoted price, compared to common classical techniques used in the industry,” officials say.
IBM officials say their quantum computers are available via the cloud and Qiskit, an open quantum software stack.
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