You are totally INCORRECT! The first waves of quants in the early 90s to mid 90s were phds in physics hired "right out of particle accelerator" labs. Now, employers are a bit more picky and asking for financial experience. But at the really really hardcore quant trading desk/hedge funds, they do NOT ask for finance background. In fact, at DE Shaw and Renaissance having some financial background might COUNT AGAINST you. They want really really smart people who has not been tainted with finance knowledge. Just great ability to think. That's it. But for the average wall st ibank, they like a phd in math,physics, econ,finance, etc. PLUS strong software skills PLUS finance knowledge. But to say derivatives has nothing to do with physics is a yes and a no. The Black-Scholes option pricing equation is nothing more than a heat diffusion stochastic partial differential equation with the variables changed to reflect volatility, time to expiration, strike price,etc. In fact, Fisher Black, had NO finance training when he went to finance and came up with the option pricing model. Black did his undergrad and phd in math&physics at Harvard University. Robert Merton, who won the Nobel Prize for options as well, had a mathematical engineering background and did NOT take a single economics course before he enrolled in the MIT econ phd program. Physics and finance have had a long love affair in terms of cross fertizilation and borrowed analytical techniques: PDE, Brownian motion, Monte Carlo, etc. used to day in finance were all from physics domain. so, don't say it does NOT apply!