The qubit of Wall Street? Has HSBC cracked quantum trading?

HSBC claims quantum computers improved bond trade predictions by 34% in lab trials. Proponents are bullish, but stress results aren’t from live trading.

A quick primer: what is quantum computing?

Put very simply, in the quantum (very small) world, things behave differently from the larger “everyday” world.

Particles can exist in a superposition—a blend of possibilities at the same time. They can also become entangled, meaning one particle’s behaviour instantly matches another’s, even across vast distances.

It’s a world of great mystery, but incredible potential.

Quantum computing isn’t just a faster version of today’s computers. Rather it is an entirely new way of processing information.

Superposition, entanglement, and interference can deliver speedups that outstrip classical methods, sometimes exponentially so. Especially on calculations such as factoring huge numbers.

However, not every problem benefits from a quantum approach, and real machines are still far from solving most tasks faster than supercomputers.

So let’s take a breath and look at exactly what happened here.

What did HSBC do?

On 25 September, HSBC announced its quantum pilot, in partnership with IBM, delivered a 34% performance improvement in bond trading algorithms.

That’s being touted as an industry first, but only in trial conditions.

It’s not as though a quantum computer just hopped online and started trading. Instead, researchers ran offline tests with real market data.

By handing a complex set of bond market calculations to quantum hardware, they achieved a 34% gain in prediction accuracy compared to traditional methods.

“We now have a tangible example of how today’s quantum computers could solve a real-world business problem at scale and offer a competitive edge, which will only continue to grow as quantum computers advance.” Philip Intallura, HSBC Group Head of Quantum Technologies

In trading, where speed and optimisation matter enormously, that sounds like a big deal.

But remember, these results were from offline historical data, not active live trading.

If we nail quantum ... kaching???

It won’t surprise you to hear that this quantum caper is really hard!

It remains uncertain whether we’ll ever build fully fault-tolerant quantum computers. Even if we do, they won’t fit in a watch or phone. These machines will live in specialised labs or data centres, with everyday devices accessing them remotely.

But if genuine quantum advantage arrives, financial markets could be re-shaped:

• Faster risk analysis: stress tests run in seconds, not hours.

• Sharper optimisation: portfolios tuned with unprecedented accuracy.

• Cryptographic conundrums: today’s banking security algorithms could be cracked. Firstly, forcing a need for quantum-enabled protections. Secondly, making already stolen but currently inaccessible data available to prying bad guy eyes.

“While … we are some distance away from quantum computers being able to break traditional encryption, the time to prepare for this is now.” Colin Bell, HSBC Europe CEO

Fittingly the quantum is half empty and half full. Perhaps both entirely full and completely empty … at the same time.*

An opportunity for some, an existential headache for others.

Buy or sell?

HSBC’s eye-catching announcement marks a step in quantum finance research, but real-world applications remain embryonic. Gains on paper don’t yet mean resilience in the chaos of live markets.

Still every baby step matters, and this might mark the moment quantum computing moved from mathematical model to market megaplayer.

Whether it’s hype, hope, or history-making, only time and real-world trials will tell.

For the moment I’m a hold on this,

Adam S

* A little quantum joke. Sincere apologies.