What is a Quant?

Anonymous quant • 185d ago General

I know this sounds like a dumb question, but when I hear people speak about quantitative finance, it’s usually always something different every conversation. I hear terms being thrown around like HFT, alpha, arbitrage, etc, and while I understand these terms alone, I don’t quite understand what is a ‘quant’ actually is. So what is it that a quant does, and why?

VegeCropping • 184d ago

The term 'quant' in finance can really be anyone who is in quantitative finance; that is, the utilisation of mathematical and statistical models to ascertain deep insights into financial markets. Something useful that comes from this is what is known as 'market making' - a quantitative strategy which involves having a perpetual buy and sell price for a financial instrument. This is especially useful for instruments that don't have that much liquidity - 1/2

VegeCropping • 184d ago

- quants come in and provide more accurate and fair prices. Quants can also engage in 'market taking'; finding trends/mispricings in existing buys/sells on the market, and capitalising on said mispricings. This allows them to 'beat the market', which is measured by a metric called alpha (i.e. the amount of returns higher than the stock market and/or risk free rate).

broke_quant • 174d ago

Yep. May I also add that quants minimize risk and maximize returns. This is one of the core fundamental concepts of quantitative finance - if you have a strategy that generates high returns, but there is massive risk, then it may not be as good as a strategy with slightly less returns but a very low risk.

Anonymous User • 154d ago

Research fundamental analysis, technical analysis, and quantitative analysis.

Anonymous User • 154d ago

Isn't technical analysis used interchangeably with quantitative analysis?