Papers › Deep Reinforcement Learning for Online Optimal Execution Strategies

Deep Reinforcement Learning for Online Optimal Execution Strategies

17 Oct 2024arXiv:2410.13493archive 2025-07-28

Alessandro Micheli, Mélodie Monod

This paper tackles the challenge of learning non-Markovian optimal execution strategies in dynamic financial markets. We introduce a novel actor-critic algorithm based on Deep Deterministic Policy Gradient (DDPG) to address this issue, with a focus on transient price impact modeled by a general decay kernel. Through numerical experiments with various decay kernels, we show that our algorithm successfully approximates the optimal execution strategy. Additionally, the proposed algorithm demonstrates adaptability to evolving market conditions, where parameters fluctuate over time. Our findings also show that modern reinforcement learning algorithms can provide a solution that reduces the need for frequent and inefficient human intervention in optimal execution tasks.

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Deep Reinforcement LearningReinforcement Learningreinforcement-learning

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