Having worked in The City doing recruitment of financial traders, and specifically quantitative traders I was interested to read Scott Patterson’s take on quant trading.
Patterson traces the history of quant trading by starting with Ed Thorp, the maths professor who applied his theories in the gambling world. Having successfully taken on the Las Vegas tables he then took his models into the financial trading sphere in the 1950s.
He goes on to trace the development of quantitative trading from blackjack to black swans. Patterson is able to simply explain the complex ideas underpinning our financial system through an extraordinary and insightful story.
The second half of the book focuses on the crisis of 2007-2008 where a number of quant hedge funds and groups in investment banks almost collapsed. It highlights the issues of greed and conceit amongst the financial trading institutions – a character-rich tale of how brilliant mathematicians and technologists ignored the human element of trading.
It is definitely worth reading this book for an in-depth analysis of one of the points in recent financial history where things started to go awry – leading to the situation we find ourselves in 2015.