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Optimal execution is a sequential decision-making problem for cost-saving in algorithmic trading. Studies have found that reinforcement learning (RL) can help decide the order-splitting sizes. However, a problem remains unsolved: how to…

Trading and Market Microstructure · Quantitative Finance 2022-07-25 Feiyang Pan , Tongzhe Zhang , Ling Luo , Jia He , Shuoling Liu

This paper presents a continuous-time model of intraday trading, pricing, and liquidity with dynamic TWAP and VWAP benchmarks. The model is solved in closed-form for the competitive equilibrium and also for non-price-taking equilibria. The…

Mathematical Finance · Quantitative Finance 2020-03-31 Jin Hyuk Choi , Kasper Larsen , Duane J. Seppi

In recent years, quantitative investment methods combined with artificial intelligence have attracted more and more attention from investors and researchers. Existing related methods based on the supervised learning are not very suitable…

Machine Learning · Computer Science 2021-05-11 Sihang Chen , Weiqi Luo , Chao Yu

This study investigates the development of an optimal execution strategy through reinforcement learning, aiming to determine the most effective approach for traders to buy and sell inventory within a finite time horizon. Our proposed model…

Trading and Market Microstructure · Quantitative Finance 2025-11-04 Yadh Hafsi , Edoardo Vittori

Stock markets exhibit regime-dependent behavior where prediction models optimized for stable conditions often fail during volatile periods. Existing approaches typically treat all market states uniformly or require manual regime labeling,…

Machine Learning · Computer Science 2026-04-03 Mohammad Al Ridhawi , Mahtab Haj Ali , Hussein Al Osman

Stock portfolio optimization is the process of constant re-distribution of money to a pool of various stocks. In this paper, we will formulate the problem such that we can apply Reinforcement Learning for the task properly. To maintain a…

Machine Learning · Computer Science 2020-12-14 Le Trung Hieu

Questions remain on the robustness of data-driven learning methods when crossing the gap from simulation to reality. We utilize weight anchoring, a method known from continual learning, to cultivate and fixate desired behavior in Neural…

Machine Learning · Computer Science 2023-04-21 Steffen Gracla , Edgar Beck , Carsten Bockelmann , Armin Dekorsy

A promising way to mitigate the expensive process of obtaining a high-dimensional signal is to acquire a limited number of low-dimensional measurements and solve an under-determined inverse problem by utilizing the structural prior about…

Machine Learning · Computer Science 2024-07-11 Gianluigi Silvestri , Fabio Valerio Massoli , Tribhuvanesh Orekondy , Afshin Abdi , Arash Behboodi

Stock trading strategies play a critical role in investment. However, it is challenging to design a profitable strategy in a complex and dynamic stock market. In this paper, we propose an ensemble strategy that employs deep reinforcement…

Trading and Market Microstructure · Quantitative Finance 2025-11-18 Hongyang Yang , Xiao-Yang Liu , Shan Zhong , Anwar Walid

We investigate the use of Reinforcement Learning for the optimal execution of meta-orders, where the objective is to execute incrementally large orders while minimizing implementation shortfall and market impact over an extended period of…

Trading and Market Microstructure · Quantitative Finance 2025-11-20 Tomas Espana , Yadh Hafsi , Fabrizio Lillo , Edoardo Vittori

Reinforcement Learning has emerged as a promising framework for developing adaptive and data-driven strategies, enabling market makers to optimize decision-making policies based on interactions with the limit order book environment. This…

Trading and Market Microstructure · Quantitative Finance 2026-02-17 Rafael Zimmer , Oswaldo Luiz do Valle Costa

Flow-matching policies have emerged as a powerful paradigm for generalist robotics. These models are trained to imitate an action chunk, conditioned on sensor observations and textual instructions. Often, training demonstrations are…

Machine Learning · Computer Science 2025-07-22 Samuel Pfrommer , Yixiao Huang , Somayeh Sojoudi

The emerging cryptocurrency market has lately received great attention for asset allocation due to its decentralization uniqueness. However, its volatility and brand new trading mode have made it challenging to devising an acceptable…

Machine Learning · Computer Science 2021-10-19 Fengrui Liu , Yang Li , Baitong Li , Jiaxin Li , Huiyang Xie

Price movement prediction has always been one of the traders' concerns in financial market trading. In order to increase their profit, they can analyze the historical data and predict the price movement. The large size of the data and…

Machine Learning · Computer Science 2022-10-10 Naseh Majidi , Mahdi Shamsi , Farokh Marvasti

This paper studies the ubiquitous problem of liquidating large quantities of highly correlated stocks, a task frequently encountered by institutional investors and proprietary trading firms. Traditional methods in this setting suffer from…

Trading and Market Microstructure · Quantitative Finance 2025-02-13 Moustapha Pemy , Na Zhang

This work provides a Deep Reinforcement Learning approach to solving a periodic review inventory control system with stochastic vendor lead times, lost sales, correlated demand, and price matching. While this dynamic program has…

Machine Learning · Computer Science 2022-11-30 Dhruv Madeka , Kari Torkkola , Carson Eisenach , Anna Luo , Dean P. Foster , Sham M. Kakade

Reinforcement learning (RL) has shown significant promise for sequential portfolio optimization tasks, such as stock trading, where the objective is to maximize cumulative returns while minimizing risks using historical data. However,…

Machine Learning · Computer Science 2025-05-20 Haochen Yuan , Minting Pan , Yunbo Wang , Siyu Gao , Philip S. Yu , Xiaokang Yang

In this short note, we study an optimization problem of expected implementation shortfall (IS) cost under general shaped market impact functions. In particular, we find that an optimal strategy is a VWAP (volume weighted average price)…

Trading and Market Microstructure · Quantitative Finance 2016-06-01 Takashi Kato

Much research has been done to analyze the stock market. After all, if one can determine a pattern in the chaotic frenzy of transactions, then they could make a hefty profit from capitalizing on these insights. As such, the goal of our…

Machine Learning · Computer Science 2025-05-27 Ziyi Zhou , Nicholas Stern , Julien Laasri

Metaverse is expected to create a virtual world closely connected with reality to provide users with immersive experience with the support of 5G high data rate communication technique. A huge amount of data in physical world needs to be…

Systems and Control · Electrical Eng. & Systems 2023-01-05 Peiyuan Si , Wenhan Yu , Jun Zhao , Kwok-Yan Lam , Qing Yang