QF-LearnLearn quantitative finance: free guides for beginners
Quantitative finance is the use of mathematics, statistics and programming to price financial products, measure risk and build portfolios. These free guides teach its core ideas from the ground up, each with a worked example, a chart and code you can run.
You need school algebra and a little probability: what an average, a standard deviation and a normal distribution are. Calculus helps for the “why” but is not needed to follow the examples. The code is Python, and every output shown on these pages was produced by running it.
Where to start
Start with the Black-Scholes model. It introduces the ideas every other guide builds on: volatility, discounting, and pricing without knowing where the market will go. Then read the guides in the order below. If your interest is investing rather than derivatives, jump to the Sharpe ratio.
Options and derivatives pricing
An option is the right, but not the obligation, to buy or sell something at a fixed price later. Pricing options is where quantitative finance began, and these five guides cover the core of it.
- Black-Scholes modelThe formula that prices options, one input at a time, with a worked example and Python code.
- Option GreeksHow an option’s price reacts to the stock, time, volatility and rates, with charts.
- Put-call parityThe no-arbitrage link between a call and a put, proved with a payoff chart.
- Implied volatilityThe market’s own forecast of movement, backed out of an option price with Newton’s method.
- Binomial modelPrice an option on a tree of up and down moves, then let the tree grow.
Simulation and stochastic models
When there is no formula, quants simulate. These two guides show the random-walk model of a stock and how to price anything with it.
Risk and portfolios
The other half of the job: measuring how much can go wrong, and building portfolios that earn the most for the risk they take.
Free tool
- Black-Scholes calculatorPrices, Greeks, implied volatility and a payoff chart, live in your browser.
Learn it on your phone with QF-Learn
QF-Learn is a free app that teaches all of this in short interactive lessons, with quizzes after each module, finance games such as Volatility Surfer and Price Prophet, and a certificate for every course you finish. It covers derivatives pricing, portfolio theory, stochastic calculus and risk management, in eleven languages.
Get QF-Learn when it launches
QF-Learn turns topics like this into five-minute lessons with quizzes, finance games and certificates. It is free, and it is coming to Android and iOS. Leave your email and you will be first to get it.