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What does a Quantitative Analyst do?

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  • Written By: Sara Schmidt
  • Edited By: Lindsay D.
  • Last Modified Date: 05 November 2016
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A quantitative analyst is a person who works with quantitative finance, using various techniques in a multitude of settings. Also known as a "quant" in the investment industry, this analyst may work in derivatives pricing, risk management, or many other financing positions that involve mathematics. This career began in United States during the 1930s when investors started using mathematical equations to set prices and manage stocks and bonds.

Someone interested in quantitative analyst jobs may consider majoring in physics or other mathematical studies in college. Computer programming is another area in which quants typically enter. Engineering is another skill that is useful in quantitative finance.

The demand for qualified analysts has risen so high that new PhD programs have been created within many business schools to accommodate the growing need. A number of master studies areas are available for students seeking quantitative analyst jobs, including financial engineering, mathematical trading and finance, computational finance, mathematical finance and other areas. While these programs are considered in-depth, and generally more narrow in terms of master coursework in business studies, they typically take only a single year to complete.

There are generally two main types of quantitative analysts. While some quants deal with statistical models, others work on mathematical models. Since both of these areas require a large set of skills and expertise, it is rare that a quantitative analyst will be skilled at both.

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In the banking industry, quantitative analysts support sales functions and trading by developing models that manage stocks and bonds. This provides the bank with a solution to problems with market prices and other issues. To develop such models, today's quants often utilize alpha generation platforms. These are software programs that use an automated algorithmic system that allows a quant to analyze many different strategies and solutions all at once.

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Ceptorbi
Post 4

@SimpleByte - Several types of companies hire quantitative analysts including hedge funds, insurance companies, and commercial and investment banks. Financial software companies also hire this type of analyst.

SimpleByte
Post 3

What types of companies hire quantitative analysts?

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