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How do stock brokers use math?

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Like any other person, really. What with the current financial crisis, one could argue that not very well at that, but I suppose that's not what you were after.

They mostly use a branch called financial mathematics. It deals with interest rates, discounting, present values, variance and covariance, linear regression and more. It is an interesting branch in that you can apply it on a very real thing like money, gains, investment value and risk, but, from a professional mathematician's point of view (no, I'm not one :-) ), the methods it uses are somewhat simplistic (meant to say, the formal mathematical tools employed are the basic ones like multiplication and division, addition and subtraction, powers and roots, some high-school grade statistics and one or two higher models like ordinary least squares linear regression, but that's about it). Still, there are analysts who use much more sophisticated computer-aided modelling math. They are however not the majority.

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