Abstract

Inspired by recent progress in quantum algorithms for ordinary and partial differential equations, we study quantum algorithms for stochastic differential equations (SDEs). Firstly we provide a quantum algorithm that gives a quadratic speed-up for multilevel Monte Carlo methods in a general setting. As applications, we apply it to compute expection values determined by classical solutions of SDEs, with improved dependence on precision. We demonstrate the use of this algorithm in a variety of applications arising in mathematical finance, such as the Black-Scholes and Local Volatility models, and Greeks. We also provide a quantum algorithm based on sublinear binomial sampling for the binomial option pricing model with the same improvement.

Publication Details
Publication Type
Journal Article
Year of Publication
2021
Volume
5
Number of Pages
481
DOI
10.22331/q-2021-06-24-481
URL
https://arxiv.org/abs/2012.06283
Journal
Quantum
Contributors
Groups
Date Published
06/2021