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arXiv · 2507.23310

Novel Quantum Circuit Designs of Random Injection and Payoff Computation for Financial Risk Assessment

Yu-Ting Kao·Yeong-Jar Chang·Ying-Wei Tseng
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Abstract

Quantum entanglement enables exponential computational states, while superposition provides inherent parallelism. Consequently, quantum circuits are theoretically capable of supporting large scale parallel computation. However, applying them to financial analysis particularly in the areas of random number generation and payoff computation remains a significant challenge. Experts generally believe that quantum computing relies on matrix operations, which are deterministic in nature without randomness. This inherent determinism makes it particularly challenging to design quantum circuits that require random number injection. JP Morgan[1] introduced the piecewise linear (PWL) approach for modeling payoff computations but did not disclose a quantum circuit capable of identifying values exceeding the strike price, suggesting a possible reliance on classical pre processing for interval classification. This paper presents an integrated quantum circuit with two key components: one for random number injection, applicable to risk assessment, and the other for direct payoff computation, relevant to financial pricing. These components are compatible with a scalable framework that leverages large scale parallelism and Quantum Amplitude Estimation (QAE) to achieve quadratic speedup. The circuit was implemented on IBM Qiskit and evaluated using 8 parallel threads and 1600 measurement shots. Results confirmed both the presence of randomness and the correctness of payoff computation. While the current implementation uses 8 threads, the design scales to 2 to the power of n threads, for arbitrarily large n, offering a potential path toward demonstrating quantum supremacy.

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Yu-Ting Kao, Yeong-Jar Chang, Ying-Wei Tseng. 2025-07-31. Novel Quantum Circuit Designs of Random Injection and Payoff Computation for Financial Risk Assessment. https://arxiv.org/abs/2507.23310

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