Mathematician James Nichols is a member of a small team of “hired guns” charged with the task of pricing the most complex financial securities traded.

Nichols, who completed a Bachelor of Computational Science degree at ANU in 2005, is a quantitative analyst at a leading investment bank in Sydney. He prices “exotic derivatives”, and calculates the hedges required against big price movements in the securities on which they are based. Among them are “swaptions”, derivatives based on interest rates.

Nichols draws on his solid grounding in mathematics to come up with algorithms – or problem solving steps – based on stochastic calculus. He also applies his computational skills to find shortcuts to get answers fast amid the frantic pace of the dealing room.

“At the bank, we use computational techniques to solve these problems quickly,” he says. “Often they can run hours and hours on computers if you don’t code them up properly.”

When he started his degree he had no inkling he would wind up working in the financial markets. “I never even knew these sorts of interesting and difficult problems existed in finance, much less that you could be employed in this area of mathematical finance.”

The computational science degree was flexible. “There are few other degrees that offer the scope and the freedom to choose subjects from a wide range of disciplines. And it is one of the most applicable degrees to being a practising scientist.” He says one of the main strengths of ANU was the opportunity undergraduate students had to “talk directly to professors involved in the frontline of academic research”.