Emanuel Derman

Emanuel Derman is a South African-born physicist who transitioned to Wall Street and became one of the most influential figures in quantitative finance. At Goldman Sachs, he co-developed the Black-Derman-Toy (BDT) model in 1990, an influential one-factor short-rate model for pricing interest rate derivatives that became widely used by practitioners. He later became head of quantitative strategies in the fixed income division. Derman's memoir "My Life as a Quant: Reflections on Physics and Finance" (2004) became the defining account of the physicist-to-quant transition and the culture of model-driven trading on Wall Street. He subsequently joined Columbia University, where he teaches financial engineering and continues to write on the philosophy of models in finance — arguing that financial models are metaphors, not laws of nature, and that understanding their limitations is as important as understanding their mathematics. His book "Models.Behaving.Badly" extends this philosophical critique.