How the Trading Floor Really Works

Quants’ Relationship with the Trading Floor

Although quants often sit off the trading floor, they are often seen on the trading floor sitting with traders to discuss different issues. Some of those might be issues with assumptions that have been used in models or they need to discuss financial market dynamics. This relationship is a very important relationship for risk management purposes in a bank. The traders are often not nearly as quantitative as the quants. This means they often don’t understand a lot of the mathematical terms used to price the products they trade. Terms like “monte carlo,” “path dependent,” “Gaussian distribution” and “closed form solution” are used frequently when discussing different pricing models but, while they might ...