Quants Revolution

About Quants Revolution

The quantitative investing revolution transformed finance starting in the 2000s. Mathematical models, computer algorithms, and massive data analysis replaced traditional stock picking. Renaissance Technologies, founded by Jim Simons, pioneered algorithmic trading. The Medallion Fund returned over 60 percent annually before fees for decades. DE Shaw, Citadel, and Two Sigma followed. Quants used statistical arbitrage, high frequency trading, and machine learning. Flash crashes and market disruptions revealed risks. By 2020, over 70 percent of US equity trading volume was algorithmic. The quants revolution changed who works on Wall Street, replacing stock pickers with mathematicians and computer scientists. Simons, a former codebreaker, became one of the richest people in finance.