macrocephalopod

Things I sometimes wonder: how would we know if quant hedge funds had got their hands on quantum computer tech? Would they tell us? What would the impact on the market/performance be? Would they consciously underperform their potential not to draw attention to themselves?

What part of the market would you see QC achieving consistent abnormal returns?(apart from Bitcoin ofc)

I don’t think it would be bitcoin. Anyone who had QC would have to operate like a crook, and be super discrete not to draw attention to themselves. Being obvious in the market would induce a QC arms race which would annihilate your advantage quickly.

A smart outfit would just skim slim but consistent arbitrage from every corner of the market and in so doing become highly but not overly abnormally profitable. But they’d also probably be super secretive about their strategy and keep the fund closed to outsiders.

Being too obvious in any one market would be a silly giveaway I think. There is only one fund that fits the bill and, as it happens, also has indirect links to the NSA.

I get that and I agree but I'm still not sure how you make money with QC

I’m not a quant or even a mathematician but I sense it would provide the next phase of HFT which has now hit the barrier of speed of light. You can’t get the price signal faster to get ahead. But with QC perhaps you can model probabilistically the next micro second of action

I’m very much not a QC expert but I don’t think any experts believe quantum computers would be useful for this. The only financial application I’ve heard about is faster Monte Carlo simulation for option pricing or risk models, neither of which is useful for price prediction.