Quantitative Finance · Thu, Oct 29, 2026

arXiv Quantitative Finance (q-fin).

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The Generalised Kessler Syndrome and the Persian Gulf

In briefGeneralised Kessler Syndrome and the Persian Gulf: Extending orbital debris cascade theory to supply chains and analysing maritime restrictions' impact on Gulf states

SummaryThe paper generalises the Kessler syndrome, a runaway cascade of orbital debris, to supply chains, identifying an additive channel where failures trigger further failures and a subtractive channel that erodes containment and recovery capacity. When damage outpaces repair, the system irreversibly settles into a new state. Applied to the Persian Gulf, it argues that maritime supply restrictions from spring 2026 are poorly offset by air and road alternatives, unevenly depleting inventories and impairing logistics itself. The author formulates the problem as a Kelly portfolio allocation under a weakest-link payoff, concluding that the optimal strategy favours lagging inputs over leading ones.

Bernhard K Meister

arXiv q-fin.RM

Information Flow and Market Risk: Transformer-Based Evidence on Sentiment and Volatility Dynamics

In briefInformation Flow and Market Risk: Transformer-Based Sentiment and Volatility Evidence

SummaryThis study tests whether transformer-based financial news sentiment improves equity volatility forecasts beyond conventional market predictors. Using eleven US stocks, it compares models incorporating the VIX, AAII investor sentiment, and ModernFinBERT news sentiment through walk-forward testing. A naive persistence benchmark achieves the lowest average QLIKE loss at all horizons, and text sentiment yields no general forecasting advantage.

Szymon Lis, Robert \'Slepaczuk, Pawe{\l} Sakowski

arXiv physics.soc-ph · cs.SI · q-fin.TR

Early-Buyer Groups and Fast-Wallet Teams on a Bonding-Curve Launchpad: A Prospective Measurement Study of pump.fun on Solana

In briefEarly buyers and fast wallets on pump.fun: a measurement study

SummaryThis paper studies coordinated wallet groups on the pump.fun token launchpad on Solana, using records of about 200,000 token launches and over 15 million curve trades. The authors identify 23,710 wallet groups, whose activity is highly concentrated and splits into serial creators and long-lived rings of early buyers. They report that group members buy earlier than other buyers, but treat this as an association, and find that following the earliest group signal loses money out of sample.

Fail Gafarov

arXiv cs.GT · econ.TH · q-fin.GN

Persistence of Bounded Rationality in Financial Markets: An Evolutionary Game-Theoretic Model

In briefWhy Bounded Rationality Persists in Financial Markets: An Evolutionary Game Model

SummaryThis paper models a financial market as two trader types, relatively rational and boundedly rational, whose shares change over time according to relative performance. When the two types complement each other and their friction costs differ moderately, a unique stable mix exists in which boundedly rational trading persists. Lowering the cost of disciplined trading, such as through algorithmic and AI trading, shifts the mix toward rational trading but does not eliminate bounded rationality unless the cost advantage passes an explicit threshold.

Cheng Zhang