quant
noun

- an expert at analyzing and managing quantitative data

- someone in the financial industry who uses mathematical methods, for example to measure the risk of an investment

Merriam-Webster / Cambridge Dictionary

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WORD ORIGIN

The term "quant" is commonly used in the context of finance, and refers to a quantitative analyst. The word "quantitative" comes from Latin quantitāt, the stem of quantitās, which means "quantity" or "amount". This is combined with the term "analyst", which is derived from the Greek term analystes meaning "one who analyzes".

A "quant" in the finance industry is a specialist who applies mathematical and statistical methods to financial and risk management problems. They originate and implement complex models that allow financial firms to price and trade securities and manage risk.

The use of "quant" as a short form of "quantitative analyst" is a relatively modern development, reflecting the growing importance of quantitative analysis in the finance industry since the late 20th century.

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THE QUANTS WHO ALMOST GOT FOOLED

In the early 2000s, a group of quants at a hedge fund called Renaissance Technologies were trying to predict the movements of the stock market using complex algorithms and mathematical models. But they were having trouble achieving consistent profits, and they couldn't figure out why.

One day, one of the quants decided to test a theory that had been brewing in his mind for some time. He took the data from one of the firm's models and plotted it against the movements of the S&P 500 index. To his surprise, he found that the two graphs were almost identical.

It turned out that the model was not actually predicting the market's movements at all, but was simply tracking them. The quants had been fooled by a statistical phenomenon known as "overfitting," where a model becomes so complex that it starts to fit the noise in the data, rather than the underlying signal.

The discovery was a major breakthrough for the quants at Renaissance, who realized that they needed to simplify their models and focus on the underlying trends in the market, rather than trying to predict every little fluctuation. The firm went on to become one of the most successful hedge funds in history, with annual returns averaging more than 35% over the past three decades.

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SYNONYMS

- a person who works with mathematics

accountant, actuary, algebraist, analyst, arithmetician, auditor, bean counter, binary brainiac, bookkeeper, calculationist, certified public account (CPA), certified public accountant, comptroller, computist, cryptographer, decimal dreamer, digit detective, financial executive, financial officer, fraction fanatic, function fiend, geometrician, geometer, logarithmologist, math magician, mathemancer, mathematologist, mathemagician, mathemate, mathetist, number cruncher, number ninja, number theorist, numerical analyst, numerist, polygon pro, probability prophet, QUANT, statistician, theoretician, topologist, trigonometrist

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SMUGGLE OWAD into an English conversation, say something like:

“QUANTS have been known to use mathematical models to predict everything from the weather to the outcome of presidential elections."

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