(Hons) at the University of Cape Town, and received a Ph.D. in theoretical physics from Columbia in 1973, where he wrote a thesis that proposed a test for a weak-neutral current in electron-hadron scattering.

[citation needed] In 1985 Derman joined Goldman Sachs' fixed income division where he was one of the co-developers of the Black–Derman–Toy interest-rate model.

[citation needed] He left Goldman Sachs at the end of 1988 to take a position at Salomon Brothers Inc. as head of Adjustable Rate Mortgage Research in the Bond Portfolio Analysis group.

He retired from Goldman Sachs in 2002 and took a position at Columbia University and Prisma Capital Partners (acquired by KKR).

[citation needed] Derman was named the IAFE/SunGard Financial Engineer of the Year 2000,[5] and was elected to the Risk Hall of Fame in 2002.

[citation needed] In 2011, Derman published a new book titled Models.Behaving.Badly: Why Confusing Illusion With Reality Can Lead to Disaster, on Wall Street and in Life.

Intuition, the deepest kind of knowledge, comes only occasionally, after long and hard work, and is a merging of the understander with the understood.