The price of bitcoin has almost doubled since the beginning of the year, while gold has fallen by almost 15%. Cryptocurrency has emerged as a competitor to gold as a hedge against inflation, that is, a protection against depreciation. Gold is often used as such a hedge: when the US dollar loses value due to inflation, the price of gold tends to increase.
Your Guide to the World of Quantum
Options contracts are more popular than ever, with more options contracts traded last year than any other year in history.1 With people spending more time at home due to the COVID-19 pandemic, many are turning to trading and investing their new surplus of time and money. Brokers have eliminated previous barriers in options trading with smaller fees, increased usability, and the elimination of required minimum account balances to trade options.
Historic levels of cold and snow left millions of people without power in Texas due to a surge in demand for electricity. In the state, the majority of electrical power (about 52%) is produced using natural gas. Texas also supplies 27% of U.S. marketed production, by far the largest share of any U.S. state. How was the demand for natural gas affected by the extreme winter weather in Texas? In turn, how did that affect the natural gas futures market?
Large-scale events tend to affect the futures market. For example, demand for natural gas is affected by the weather. Demand is also affected by the patterns in people’s day-to-day lives, which have been greatly affected by the COVID-19 pandemic. In this article, we will look at a past event in the natural gas futures market, and explain why we should look for the same pattern toward the end of the present winter. The analysis is guided by the market sentiment tool, the CME Market Sentiment Meter (MSM).
Andrew Milne immigrated from England to Canada as a child. He grew up partly in Toronto and partly in Vancouver. He began his studies in Computing Science at Simon Fraser University but later transferred to the University of British Columbia (UBC) to obtain his bachelor’s degree in Electrical Engineering.
The study of finance relies on making the best possible decisions despite future uncertainty. There is always risk when making financial decisions, and it goes hand in hand with return. A core problem in computational finance is risk minimization, and classical computers (that is, non-quantum computers) are often used to solve this problem using a variety of algorithms. But such methods are not always the solution. It will be explained below why there are limitations to using classical computers to solve challenging real-world financial problems, and what is being done to overcome these limitations by means of quantum computing.
The world is in the wake of the Information Age and computer technology is increasingly improving almost all industries. In finance, for example, algorithmic trading can be more profitable than human trading because of the speed and data processing advantages that computers have over human traders. But not all algorithms are equal. Some perform better than others. In certain cases, there are missed opportunities in which trading decisions could have been navigated from good to better, resulting in greater profit.
The US elections are held on the first Tuesday of November, and campaign-related events are widely covered in the news. These events generally have an impact on various US markets as the winning candidate’s policies and viewpoints are very likely to tangibly affect many aspects of US operations going forward into the candidate’s term.
Events that occur in October can greatly influence the results of the election simply because they happen at a time leading up to an election. The term “October surprise” refers to these types of events.
Many problems in finance take the form of mathematical optimization problems. As an example from portfolio optimization, an asset manager may be tasked with allocating funds across a pool of assets while maximizing the return at a given level of risk. However, conventional approaches often fail when computational resources cannot handle the amount of “noisy” real-world data (i.e., useful data that is corrupted or distorted by other, meaningless data), or extrapolating for missing data, or account for the correlations between all assets.
It is widely believed that gold prices reveal the overall health of the economy, and will continue to be an integral part of foreign exchange markets. Aside from the usual suspects (i.e., market activity, wealth reserves, or supply and demand), major events involving economic policy tend to affect gold prices.