900 year old Algorithms!

We’ve been talking a lot about algorithms of late, mostly as to how they are used and relate to so called Quants, as covered in our recent whitepaper.

Algorithms (or Algos for short) are the tools quants develop to make the lives of traders easier. You can’t get very far in one without the other. Quantitative strategies are those employed in a scientific and mathematical way. Like this: when x happens, do y. Algorithms, usually expressed using computer code, define those instructions, essentially doing everything from taking the effort of making the trade off a trader’s plate to allowing for the testing of hundreds of years of data. Trading Algos cover a few steps, from the strategy creation, moving into the strategy generation (both order creation and size), then the actual trade execution, and finishing out with position management.

But we didn’t know the true origin of the word Algorithm, which according to this BBC video, comes from a Persian scholar named  al-Khwarizimi who are around way back in AD780. Apparently, when they translated his works 300 years later and “Latinized” his name, it became the term ‘algoritmi’. They finish the piece in much the same way we start ours – mentioning that “algorithms are everywhere now, helping us get from A to B, driving internet searches, making recommendations of things for us to buy, watch, or share. And predicting how we vote, or who we fall in love with”.

Take a look:

A good refresher on the algorithm and its history, even if it doesn’t touch on the heavy link algorithms now have to AI and Fintech and Quants (for that, read here).

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