FT: “Physicists and the financial markets”

If you have not seen it, check out this interesting piece on FT on the continuing fascination Wall St has with physicists.


An excerpt:

Banks and hedge funds have lured physicists for more than two decades, from the shrinking ranks of academic science or from corporate research departments such as Bell Labs in the US. The heads of trading desks were hungry for anyone who could bring new theory to the chaos of the markets or who could model the price of complex derivatives the same way they could divine laws for the physical world.

Little wonder. Vast fortunes can accrue to the most successful of these number crunchers, the so-called “quants” who can spot the market patterns that others cannot. Renaissance Technologies, the Long Island, New York-based hedge fund created by former codebreaker Jim Simons, now manages $39bn and provides a comfortable career for those trained as physicists, mathematicians and computer scientists.

Yet for some of those who have crossed over or undertaken research collaborations with traders, there remains a belief that the insights of physics have been imperfectly applied.


Read more:


Carlos Alvarenga

Founder and CEO at KatalystNet and Adjunct Professor in the Logistics, Business and Public Policy Department at the University of Maryland’s Robert E. Smith School of Business.

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