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We derive a new high-order compact finite difference scheme for option pricing in stochastic volatility jump models, e.g. in Bates model. In such models the option price is determined as the solution of a partial integro-differential…

Computational Finance · Quantitative Finance 2019-02-25 Bertram Düring , Alexander Pitkin

This paper investigates, a new class of fractional order Runge-Kutta (FORK) methods for numerical approximation to the solution of fractional differential equations (FDEs). By using the Caputo generalizedTaylor formula and the total…

Numerical Analysis · Mathematics 2023-03-06 F. Ghoreishi , R. Ghaffari

We present a method for approximating solutions of Stochastic Differential Equations (SDEs) with arbitrary rates. This approximation is derived for bounded and measurable test functions. Specifically, we demonstrate that, leveraging the…

Probability · Mathematics 2024-03-27 Clément Rey

We develop two new sets of stable, rank-adaptive Dynamically Orthogonal Runge-Kutta (DORK) schemes that capture the high-order curvature of the nonlinear low-rank manifold. The DORK schemes asymptotically approximate the truncated singular…

Numerical Analysis · Mathematics 2023-08-08 Aaron Charous , Pierre F. J. Lermusiaux

A focus of recent research in quantum computing has been on developing quantum algorithms for differential equations solving using variational methods on near-term quantum devices. A promising approach involves variational algorithms, which…

Quantum Physics · Physics 2026-02-03 David Dechant , Liubov Markovich , Vedran Dunjko , Jordi Tura

Next-generation exascale machines with extreme levels of parallelism will provide massive computing resources for large scale numerical simulations of complex physical systems at unprecedented parameter ranges. However, novel numerical…

Computational Physics · Physics 2023-02-08 Komal Kumari , Emmet Cleary , Swapnil Desai , Diego A. Donzis , Jacqueline H. Chen , Konduri Aditya

Runge-Kutta (RK) methods may exhibit order reduction when applied to certain stiff problems. While fully implicit RK schemes exist that avoid order reduction via high-stage order, DIRK (diagonally implicit Runge-Kutta) schemes are…

Numerical Analysis · Mathematics 2023-05-31 Abhijit Biswas , David Ketcheson , Benjamin Seibold , David Shirokoff

There exist many Runge-Kutta methods (explicit or implicit), more or less adapted to specific problems. Some of them have interesting properties, such as stability for stiff problems or symplectic capability for problems with energy…

Numerical Analysis · Mathematics 2018-04-16 Julien Alexandre dit Sandretto

Explicit Runge-Kutta schemes with large stable step sizes are developed for integration of high order spectral difference spatial discretization on quadrilateral grids. The new schemes permit an effective time step that is substantially…

Numerical Analysis · Mathematics 2013-07-16 M. Parsani , D. I. Ketcheson , W. Deconinck

Extended Stability Runge-Kutta (ESRK) methods are crucial for solving large-scale computational problems in science and engineering, including weather forecasting, aerodynamic analysis, and complex biological modelling. However, balancing…

Machine Learning · Computer Science 2025-06-27 Gavin Lee Goodship , Luis Miralles-Pechuan , Stephen O'Sullivan

We review Fujiwara's scheme, a sixth order weak approximation scheme for the numerical approximation of SDEs, and embed it into a general method to construct weak approximation schemes of order $ 2m $ for $ m \in \mathbf{N} $. Those schemes…

Probability · Mathematics 2009-11-24 Kojiro Oshima , Josef Teichmann , Dejan Veluscek

In this paper, we provide a new scheme for approximating the weakly efficient solution set for a class of vector optimization problems with rational objectives over a feasible set defined by finitely many polynomial inequalities. More…

Optimization and Control · Mathematics 2022-05-26 Feng Guo , Liguo Jiao

Stochastic differential equation (SDE) models are the foundation for pricing and hedging financial derivatives. The drift and volatility functions in SDE models are typically chosen to be algebraic functions with a small number (less than…

Computational Finance · Quantitative Finance 2024-06-04 Lei Fan , Justin Sirignano

In this paper, we develop a higher order symmetric partitioned Runge-Kutta method for a coupled system of differential equations on Lie groups. We start with a discussion on partitioned Runge-Kutta methods on Lie groups of arbitrary order.…

High Energy Physics - Lattice · Physics 2011-09-15 Michèle Wandelt , Michael Günther , Francesco Knechtli , Michael Striebel

New simulation approaches to evaluating path-dependent options without matrix inversion issues nor Euler bias are evaluated. They employ three main contributions: Stochastic approximation replaces regression in the LSM algorithm; Explicit…

Pricing of Securities · Quantitative Finance 2018-04-13 Michael A. Kouritzin

Electron collisions, described by stochastic differential equations (SDEs), were simulated using a second-order weak convergence algorithm. Using stochastic analysis, we constructed an SDE for energetic electrons in Lorentz plasma to…

Plasma Physics · Physics 2018-11-15 Wentao Wu , Jian Liu , Hong Qin

Simulation-based techniques such as variants of stochastic Runge-Kutta are the de facto approach for inference with stochastic differential equations (SDEs) in machine learning. These methods are general-purpose and used with parametric and…

Machine Learning · Computer Science 2021-11-01 Arno Solin , Ella Tamir , Prakhar Verma

High-dimensional partial differential equations (PDE) appear in a number of models from the financial industry, such as in derivative pricing models, credit valuation adjustment (CVA) models, or portfolio optimization models. The PDEs in…

Numerical Analysis · Mathematics 2020-07-15 Christian Beck , Weinan E , Arnulf Jentzen

Gamma distributed delay differential equations (DDEs) arise naturally in many modelling applications. However, appropriate numerical methods for generic Gamma distributed DDEs are not currently available. Accordingly, modellers often resort…

Numerical Analysis · Mathematics 2021-04-09 Tyler Cassidy , Peter Gillich , Antony R. Humphries , Christiaan H. van Dorp

Sampling with Markov chain Monte Carlo methods often amounts to discretizing some continuous-time dynamics with numerical integration. In this paper, we establish the convergence rate of sampling algorithms obtained by discretizing smooth…

Machine Learning · Statistics 2020-02-04 Xuechen Li , Denny Wu , Lester Mackey , Murat A. Erdogdu