Permissability of Quantitative Analyst Role

AsslamuAlaykum,

Is working as a “Quant” or Quantitative Analyst permissable? If not, what elements deem it to be impermissable?

Job Description:
Responsibilities will differ according to the employer (e.g., sell-side vs. buy-side), product focus (e.g., asset-backed securities vs. commodities).
A quant may be required to:

  • Research and analyze market trends and statistics to make modeling decisions
  • Develop and implement complex quantitative models (e.g., models for trading equities) and analytical software/tools
  • Perform daily statistical analyses (e.g., risk analytics, loan pricing and default risk modeling) and coding tasks (e.g., pattern recognition or machine learning)
  • Detail model specifications and methods of data collection
  • Test new models, products and analytics programs
  • Maintain and modify financial models while in use
  • Apply or invent independent tools to verify results
  • Collaborate with teams of mathematicians, computer engineers and physicists to develop optimal strategies
  • Consult with financial industry personnel on trading strategies, market dynamics, trading system performance, etc.
  • Generate requirement documentation for software developers
  • Present and interpret data results to senior management and clients
  • Use complex quantitative models to price derivatives, options, and other securities

There are quants who are experts in a specific area – statistical arbitrage, derivative pricing, quantitative investment management, algorithmic trading or electronic market-making.

JazakAllah.

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Wasalam

May Allah bless you.
My understanding of the role of a quant is that, their work directly influence the decision making of a financial institution. For example, it may influence the way an asset will be priced, or how to manage the risk of a financial product etc. Hence, such a role would only be permissible if you are working in a shariah compliant sector.

And Allah knows best!

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