Quantum computers are expected to contribute more efficient and accurate ways of modeling economic processes. Quantum hardware is currently available at a relatively small scale, but effective algorithms are limited by the number of logic gates that can be used, before noise from gate inaccuracies tends to dominate results. Some theoretical algorithms that have been proposed and studied for years do not perform well yet on quantum hardware in practice. This encourages the development of suitable alternative algorithms that play similar roles in limited contexts. This paper implements this strategy in the case of quantum counting, which is used as a component for keeping track of position in a quantum walk, which is used as a model for simulating asset prices over time. We introduce quantum approximate counting circuits that use far fewer 2-qubit entangling gates than traditional quantum counting that relies on binary positional encoding. The robustness of these circuits to noise is demonstrated. While this paper is mainly about robust simplified quantum circuit designs, we compare some aspects of the results with price change distributions from stock indices, and compare the behavior of circuits with and without mid-measurement to trends in the housing market.
Quantum computers are expected to contribute more efficient and accurate ways of modeling economic processes. Quantum hardware is currently available at a relatively small scale, but effective algorithms are limited by the number of logic gates that can be used, before noise from gate inaccuracies tends to dominate results. Some theoretical algorithms that have been proposed and studied for years do not perform well yet on quantum hardware in practice. This encourages the development of suitable alternative algorithms that play similar roles in limited contexts. This paper implements this strategy in the case of quantum counting, which is used as a component for keeping track of position in a quantum walk, which is used as a model for simulating asset prices over time. We introduce quantum approximate counting circuits that use far fewer 2-qubit entangling gates than traditional quantum counting that relies on binary positional encoding. The robustness of these circuits to noise is demonstrated. While this paper is mainly about robust simplified quantum circuit designs, we compare some aspects of the results with price change distributions from stock indices, and compare the behavior of circuits with and without mid-measurement to trends in the housing market.
Abstract Quantum algorithms for the pricing of financial derivatives have been discussed in recent papers. However, the pricing model discussed in those papers is too simple for practical purposes. It motivates us to consider how to implement more complex models used in financial institutions. In this paper, we consider the local volatility (LV) model, in which the volatility of the underlying asset price depends on the price and time. As in previous studies, we use the quantum amplitude estimation (QAE) as the main source of quantum speedup and discuss the state preparation step of the QAE, or equivalently, the implementation of the asset price evolution. We compare two types of state preparation: One is the amplitude encoding (AE) type, where the probability distribution of the derivative’s payoff is encoded to the probabilistic amplitude. The other is the pseudo-random number (PRN) type, where sequences of PRNs are used to simulate the asset price evolution as in classical Monte Carlo simulation. We present detailed circuit diagrams for implementing these preparation methods in fault-tolerant quantum computation and roughly estimate required resources such as the number of qubits and T-count.
The advent of noisy intermediate-scale quantum (NISQ) devices has not only opened up new possibilities to studying quantum computational benefits, but it has also presented new challenges associated with noise and short coherence times. Entanglement is one of the inherent resources that can be used to perform quantum computation and implement the performance and reliability of quantum algorithms. This paper looks at entanglement dynamics in NISQ machines subjected to natural noises. The study focuses on the problem of examining the role of various noise channels in the creation, dynamics, and decay of the entanglement during quantum operations, such as depolarizing, amplitude damping, and phase damping. The study is based on theoretical modeling and numerical simulations of multi-qubit quantum circuits to determine the stability of entangled states with respect to circuit depth and intensity of noise. Concurrence and von Neumann entropy are examples of entanglement measures that are used to characterize correlations between qubits as well as to trace the dynamics of these correlations across computational interactions. The results show that noise has major impacts on entanglement distribution, which tends to cause rapid decays in highly entangled states with increase in circuit complexity. The findings, however, also show that there are some circuit architectures and error-mitigation schemes that can somewhat sustain entanglement with moderate levels of noise. The paper also emphasizes the relevance of minimalizing sequence of gates, and reduced circuit depth in an effort to preserve useful entanglement in present-day quantum hardware. These observations help in understanding the behaviour of quantum correlations better in real world quantum devices and provide a way of developing more resilient quantum algorithms that would work on NISQ systems. In general, the article offers a systematic view on entanglement behavior in disordered quantum systems and highlights its value in the development of quantum computing applications in the near term.
Quantum computing represents one of the most disruptive technological paradigms of the 21st century, with profound implications for economic modelling, financial optimization, and computational decision-making. Unlike classical computing, quantum systems leverage superposition, entanglement, and interference to solve problems of exponentially higher complexity, a capability with transformative potential for economics and finance. This study examines the intersection of quantum computing and economics, systematically evaluating both the promises and the barriers defining this emerging field. Regarding opportunities, quantum algorithms, such as the Quantum Approximate Optimization Algorithm (QAOA) and Grover's algorithm, demonstrate significant theoretical advantages in portfolio optimization, risk assessment, option pricing, and the resolution of large-scale combinatorial problems that are intractable for classical machines. Quantum machine learning extends these prospects, offering accelerated capabilities for pattern recognition and predictive modelling relevant to financial markets. However, substantial barriers temper these expectations. Current quantum hardware operates in the NISQ (Noisy Intermediate-Scale Quantum) era, where decoherence, gate errors, and a limited number of qubits constrain practical applicability. The gap between theoretical quantum advantage and real-world economic implementation remains significant, compounded by a shortage of specialists, high infrastructure costs, and the absence of standardized programming frameworks tailored to economic applications. Through a bibliometric analysis of existing literature and a critical review of recent experimental results, the study maps the current state of quantum computing adoption in economics, identifies the most active research frontiers—quantum game theory and quantum portfolio optimization—and outlines the conditions under which quantum advantage could become economically relevant. The findings suggest that, although quantum computing will not transform economic practice in the short term, its long-term disruptive potential warrants proactive engagement from economists, financial institutions, and policymakers.
Quantum noise is a central challenge in quantum computing across many applications. Extensive work has examined how qubits couple to their environment, leading to decoherence and irreversible relaxation. This work studies a continuous coherent noise model for quantum circuits and compares it with a discrete Pauli model. The focus is on small, coherent gate errors that accumulate across circuit depth. These errors are modeled as random rotations on the Bloch sphere using a von Mises-Fisher distribution. In the small-angle limit, the model reduces to an isotropic Gaussian distribution. We test the model on quantum error-correction circuits based on the [[5,1,3]] and [[7,1,3]] codes. A variant of Grover's search circuit with different qubit counts is also examined. To enable fair comparison, we introduce a model-independent matching scheme. Pauli and continuous noise channels are aligned using the binary entropy at readout. This isolates the effect of noise structure at fixed uncertainty. An approximate analytical method for the propagation of coherent errors is also developed. The method tracks error distributions both on Clifford and non-Clifford circuits without full Monte Carlo sampling. It reduces simulation cost while preserving accuracy for circuit-level error estimates. The approximation is validated against brute-force simulations, identifying its regime of validity with Clifford and non-Clifford circuits under error correction. Our results show that continuous coherent noise and Pauli noise lead to comparable logical-error trends in the stabilizer-code circuits studied here. This behavior is consistent with syndrome extraction projecting a general single-qubit error onto Pauli-error subspaces before recovery. They also show where simplified propagation models work well and where their accuracy is reduced.
Options are financial instruments whose payoffs are determined by the value of an underlying asset. These underlying assets are typically stocks, interest rates, or exchange rates, but can also include commodities such as energy or agricultural products. Options serve diverse purposes, including hedging against price volatility and speculating on market movements. Additionally, they play a critical role in assessing certain positions on the balance sheets of insurance companies, particularly in the context of solvency capital requirement calculations. As an option’s payoff lies in the future and is stochastic in nature, finding a fair price today is a non-trivial task. The focus of this work is finding quantum algorithms for calculating these prices and compare them to algorithms designed for classical computers. This work follows two different directions on how to improve on classical methods for option pricing. The first direction is improving on Monte-Carlo (MC) methods and the second one is adapting Fourier based pricing algorithms. The Amplitude Estimation (AE) algorithm promises a quadratic speedup compared to classical MC. This fact makes this algorithm an interesting candidate for improvements by quantum algorithms. It was shown in the literature, that simple options with very crude discretization of the underlying stochastic models, can be implemented on a quantum device and evaluated with AE. One big challenge is the efficient implementation of the option’s payoff profile. To solve this problem colleagues and I have introduced a multi-objective genetic algorithm to automatically find well performing and efficient circuits to implement the payoff of non-path-dependent European options on one or more underlyings. Another strategy for pricing options is based on the fact, that in many models the characteristic function of the underlying is numerically more tractable than its distribution function. There are methods that make use of this fact and the performance of the Fast Fourier Transform (FFT) to efficiently calculate prices for European call options for many strikes in one go. The quantum version of the FFT, the Quantum Fourier Transform (QFT), is in some sense, even faster than its classical counterpart. We have adapted the existing classical method to make use of QFT, to benefit from its performance. Finally, the different strategies are benchmarked and compared regarding their accuracy, their potential for scaling and their adaptability to different styles of derivatives and models. The result of this comparison are requirements on the quantum hardware for the methods to be viable as well as use cases where each method has its benefits over the others.
Efficient quantum realizations of arithmetic operations, such as multiplication/division, addition/subtraction, square root, and arcsine — are of utmost importance for several quantum algorithms of practical importance. In the literature, such implementations are reported with the objective of minimizing qubit count, Toffoli/T/CNOT gate count, logical depth, quantum volume, and other commonly used metrics. By extending the realm of quantum states to higher dimensions, it has been demonstrated recently that intermediate qutrits can be leveraged to reduce ancilla qubits, thereby reducing qubit count. In this paper, we have incorporated this approach to prepare efficient implementation for several quantum arithmetic operations, obtaining significantly lowered qubit count. As an exemplary application, we study derivative pricing, in which, quantum arithmetic circuits are necessary for path loading using the re-parameterization method, as well as the payoff calculation. The intermediate qutrit approach requires to access higher energy levels, making the design prone to errors. Nevertheless, we show that the overall decrease in the error probability of error is significant owing to the fact that we achieve circuit robustness compared to the qubit-only approach in this NISQ era. We also study how we may achieve possible effectiveness with fewer gate counts of the proposed approach in the fault-tolerant setting.