Lineage-Aware Search Control for LLM-Based Evolutionary Factor Mining

Modern quantitative trading increasingly relies on systematic models to extract predictive signals from large-scale financial data, where alpha factor discovery plays a central role in transforming market observations into tradable signals. Recent LLM-based methods have shown promise in automating factor generation, but most of them still rely on prompt-level generation--evaluation--feedback loops for iterative optimization. As the loop becomes longer, repeatedly appended historical candidates and feedback can cause context explosion, increase inference cost, dilute useful information, and introduce feedback drift. Moreover, these methods often depend on very large LLMs whose stable generation preferences may lead to structurally similar expressions, redundant candidates, and search stagnation. To address these limitations, we propose QuantEvolver, a self-evolving alpha factor discovery framework based on reinforcement fine-tuning. Instead of accumulating feedback in the prompt, QuantEvolver converts executable quantitative evaluation into policy updates, enabling a Miner LLM to internalize historical optimization experience through parameter learning. Specifically, QuantEvolver constructs high-quality seed factors, builds diverse seed--time-window training tasks, generates executable Factor DSL expressions, evaluates them through Regime Backtest, and optimizes the Miner LLM with Diversity-Complementarity Reward. During training, high-quality factors are continuously accumulated in a Mined Factor Database, which serves as the final discovered factor library. Extensive experiments on three realistic market benchmarks demonstrate the effectiveness of QuantEvolver, which consistently improves the primary evaluation metric of each task over existing LLM-based alpha factor discovery baselines, produces higher-quality and more complementary factor pools.

Automated alpha mining has increasingly adopted large language model (LLM) agents for factor generation and iterative discovery. However, existing LLM-based systems often delegate both factor construction and search decisions to the agent itself, without an explicit exploration space or a principled mechanism for navigating that space. As a result, exploration remains largely implicit and difficult to control or optimize systematically. We introduce AlphaSchema, which constructs and explores a structured space of trading semantics for alpha mining. Each point in this space is a schema plan composed of Event, Context, Qualities, Direction, and Output, specifying the semantics of a candidate factor before implementation. AlphaSchema decouples exploration from implementation: an LLM translates selected schema plans into executable factors, while evaluated rewards are accumulated to learn a surrogate model over the semantic space. An iterative selection mechanism uses this model to balance global exploration, surrogate-guided exploitation, and local mutation. Experiments on the Chinese stock market show that AlphaSchema discovers factor pools with strong predictive and portfolio performance. Further analyses show that the semantic search process navigates diverse regions while increasingly allocating evaluations toward high-reward regions, and that implementations of the same schema plans by different LLMs exhibit comparable predictive quality, suggesting that alpha mining quality is largely robust to the choice of LLM within our framework.

Formulaic alpha mining seeks to discover executable expressions that capture predictive market signals in a vast, noisy search space. Recent LLM-based approaches use prompting, iterative search, or seed-factor evolution, leaving direct factor construction through policy learning less explored. To address this, we introduce AlphaRLM, a reinforcement-learning framework that trains LLMs to construct executable symbolic factors from financial literature without input factor expressions. AlphaRLM incorporates Literature-Guided Operator Assembly (LEGO), which conditions factor construction on literature-derived ideas and executable operators, providing semantic priors for exploration. It further aligns the generation policy with market feedback through executable-validity and grouped-return-separation rewards that capture non-monotonic structures across factor quantiles. Extensive experiments on CSI 300, CSI 1000, and S&P 500 show that AlphaRLM outperforms strong factor-mining and LLM-based baselines in annualized excess return. Notably, the 8B model achieves strong cross-market performance, highlighting the promise of literature-conditioned, market-aligned factor generation.