Trading & Prenatal Hormone Levels
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“Traders are succeeding not so much because they are rational, but because they have certain biological traits, including confidence, an appetite for risk, search persistence, and speed of reactions,” all of which are derived from prenatal exposure to testosterone.”
-John Coates, University of Cambridge neuroscientist and former trader
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Here’s a fascinating study to get your weekend off in the right direction
“Coates examined the digit ratio of 44 male “high frequency” traders in London who buy and sell securities, sometimes in amounts greater than $1 billion, but hold their positions for minutes, sometimes only seconds. He found that traders with a longer ring finger than index finger made more money.
“We were on the trading floor taking samples for another experiment, and I read an article about digit ratio and sports,” says Coates. “I didn’t put too much stock in the measure, but we thought, ‘Why not look at fingers?’ We were shocked by the results.”
Exposure to high levels of testosterone before birth appears to make men more sensitive to the hormone as adults. In addition to playing a role in sexual functioning, testosterone has been associated with aggressive behavior and enhanced risk taking, and has been shown to predict performance in certain competitive sports.
Coates’ findings are consistent with a Harvard study of testosterone and financial risk taking that appeared in the November 2008 issue of Evolution and Human Behavior. Using an investment game, the Harvard researchers found that higher testosterone levels correlate with financial risk-taking behavior.
“Research on digit ratios in relation to a number of behavioral and psychological traits has exploded in the past 10 years, but many of the findings have not been as convincing [as Coates’],” Coren Apicella, lead author of the Harvard study, said in an e-mail. “Further study of biological markers and their relation to economic attributes will ultimately lead to a more comprehensive understanding of economic science.”
Fascinating stuff.
And all this time you thought it was hard work and free will . . .
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Source:
Stock Market Success May Stem from Prenatal Hormone Levels
Scott P. Edwards
The Dana Foundation Brainwork, March 19, 2009
http://www.dana.org/news/brainwork/detail.aspx?id=19832
March 21st, 2009 at 11:44 am
the ring finger of my left hand is noticeably longer than the index finger, lol, the right hand, only slightly longer… but i really feel left out in the male study : (
love this kind of stuff, though… PK linked to the Coates’ findings a couple of months ago and I passed it around. i was recently wondering about trading and blood types as well… and that may again correlate to hormone sensitivity…
March 21st, 2009 at 11:48 am
Testosterone. … Must … have … more …..
Seems to me Karen has more coursing through her veins than most men. “Big Cahones”….. :>)
March 21st, 2009 at 12:02 pm
What utter horsecrap.
They used to have us checking guy’s ring fingers back in the 70s because of this horsecrap that they were supposed to be more virile. I’m sure it was invented by some asshat with a long ring finger.
Drivel.
March 21st, 2009 at 12:05 pm
What’s the correlation with the length of other male appendages?
And how about female traders? What’s the tell there?
Science is going down the drain. Less bankers, more scientists!
March 21st, 2009 at 12:07 pm
10 Ways to Boost Testosterone
http://www.mensfitnessmagazine.co.uk/exercise/exercise_tips/1905/10_ways_to_boost_testosterone.html
March 21st, 2009 at 12:16 pm
Exposure to elevated prenatal testosterone has also been linked to homosexuality. According to certain studies, the best predictor of homosexuality amongst males is a lot of older brothers. [Not that there's anything wrong with that.] [Don't know what the studies suggest about females.]
Interesting implications, though, when you link the two studies together….especially for that London Office: 44 male “high frequency” homosexual traders….
March 21st, 2009 at 12:23 pm
BR posted:
… He found that traders with a longer ring finger than index finger made more money.
reply:
———————
Woo Woo … that’s me!! On both hands. One hand look like it belongs on a mutant.
***************************************************************************
donna Said:
March 21st, 2009 at 12:02 pm
What utter horsecrap.
Question:
—————————-
What’s the matter stubby? Jealous??
March 21st, 2009 at 12:24 pm
Hmmmm. Suntanning genitals. Now there’s an interesting concept.
@Karen. Thanks for the tip. And how many of those activities do you participate in? Cabbage, not wine. They must be kidding.
March 21st, 2009 at 12:25 pm
I have noticed my middle finger is often extended and the rest of my fist clenched if I accidentally see Larry Kudlow on TV.
March 21st, 2009 at 12:27 pm
The hormones made me do it.
March 21st, 2009 at 12:30 pm
Move over Karen.
Here comes Donna (@ 12:02).
March 21st, 2009 at 12:37 pm
Fun way to start the day… and I usually only look for trouble in the evenings : ) Phoenix, I think you know the answer to your question, and cabbage is a staple in my refrigerator…
March 21st, 2009 at 12:59 pm
Considering our current situation, maybe we should limit institutional trading decisions to eunuchs. We could call anything over $100K a capon trade.
March 21st, 2009 at 1:01 pm
[From the poster formerly known as try2bamused]
This is supposed to be science? And from such fancy places as Cambridge and Haaaaaavid no less. I am deeply disappointed.
As any kid in grade school knows, correlation does not imply causation.
For example, have they run this experiment on chimps, especially ones throwing darts in a bull market?
Phrenology lives!
March 21st, 2009 at 1:54 pm
….In short you need big balls to be a succesful trader….I’d never have thunk it.
March 21st, 2009 at 2:34 pm
The potential link between testosterone and criminality, when coupled with the theory put forth, above, would also tend to point to the underlying biological mechanisms that resulted in our current predicament.
To the “high frequency” traders who buy and sell securities, sometimes in amounts greater than $1 billion: In the interest of protecting society, you can keep your job, but only on the condition that you start carrying your doodads in a jar.
March 21st, 2009 at 2:53 pm
Speaking of balls, Nouriel Roubini had the balls to steal my ideas again:
http://www.forbes.com/2009/03/18/american-economy-housing-bubble-madoff-opinions-columnists-ponzi.html
Let’s see you guys trade on that for the next twenty years.
March 21st, 2009 at 3:01 pm
Oh, CNBC, did you have to set me up like that? Buy gold, buy oil, short the USD, go long the Euro, go long the Cando, long EM, short RE… the list is endless…
March 21st, 2009 at 3:08 pm
Or you can get divorced and marry a non-American. I don’t know, karen, if your trading strategies – as smart as they are – will be enough to protect you from the systemwide-risks we all face for at least twenty years. I am assuming twenty years while Democrats are in power, and a really bad, immediate cataclysm if the Republicans are ever returned to power.
For the first time, I think “marrying for green card” will begin to take a reverse direction.
March 21st, 2009 at 3:12 pm
Leave the country, yes; marry again, never! I’m excited that my son’s long-time girlfriend has dual citizenship : )
March 21st, 2009 at 3:20 pm
Just so everyone reading this has context, Ritholtz, karen, and The Great CNBC Sucks are all Republicans.
(Ritholtz has massive traffic of silent readers. I know because I occassionally steal some of it.)
March 21st, 2009 at 3:26 pm
Republicans that voted for Obama, and didn’t vote to re-elect Bush in the prior election, may I add… and voting for Ron Paul in the primary was worth keeping my party affiliation. : )
March 21st, 2009 at 3:37 pm
Assuming this study is true, I don’t see where it says over what timeframe the study was carried out.
With $8 TRILLION in bailouts and such, then maybe with all of the aggressive behavior and enhanced risk taking that has been going on, perhaps we should be cutting off fingers! This might be better than following the advice of a sitting senator for having bankers commit suicide . . .
Also, instead of blaming all bankers, maybe we should be asking “show me your hands” !!
March 21st, 2009 at 3:47 pm
I’ve seen similar studies but mainly in research methodology classes where they were used as examples of flawed science; i.e., even if method is robust, and it is not a surprising amount of the time, the research question should be worth asking and answering regardless.
So even if it were (1) stipulated that digit ratio was a reliable indicator of pre-natal testosterone exposure and (2) that in turn was a reliable indicator of heightened aggression and risk taking and (3) that correlated highly with more successful, large-scale day trading and (4) survivorship bias* could be compensated for adequately and (5) we ignore the possibility that more successful traders might exist who do not day trade and are not sensitive to testosterone what, in fact, has been discovered and what kind of productive followup questions might that lead to?
Bueller?
About as close as I can get to anything interesting in this area is Eric Janszen’s “Jocks and Geeks Theory of Financial System Dysfunction,” basically an hypothesis that economic cycles are defined by the power ratio of jocks vs. technocrats: Expansion means more jocks, more profits but also more profligacy and recklessness until they trash the joint, flee the scene, and the technocrats have to take over and clean things up; as good a description of where we are now as any I’ve seen, at least if one wants to avoid politics.
*compensating for survivorship bias in a study like this could involve statistical weighting or actually pairing traders with differing digit ratio on the basis of career length in case the variable in question results in shorter average time span before committing a fatal error and being replaced on the floor.
March 21st, 2009 at 3:56 pm
Not for nothing…
But those *big boys* trading the banks’ monies aren’t really traders – at least not in the same league as those of us who risk our own capital.
I get a kick out of all those clowns who traffic in OPM yet fancy themselves *traders*.
On the Philly exchange we called those guy/gals “stock execution clerks”; they were generally in their 20s; had no college degree; were paid $9.00 an hour; AND were more competent than the Wall Street desk clowns that I have to deal with these days.
Just yesterday I called one of the big brokerage houses to exercise some pinned puts and the clown who answered told me, “It was too late.”
I said, “it’s 4:03 on expiration day….you might want to go ASK SOMEBODY ELSE ABOUT THAT.”
March 21st, 2009 at 4:15 pm
This came out a little while ago. I have been using it at the bar to try to convince girls that I will make a lot of Money once I graduate (minus the whole no job thing). So far it has not been successful. So I question study.
March 21st, 2009 at 4:20 pm
Barry,
1) Scientifically significant statistical samples must be a minimum size. Anatomical features of some humans must include control populations.
2) There’s a fellow named Kuklinski (the ice killer) in prison who also has the “nerves of steel” type traits that traders so celebrate. It’s a genetic DEFECT most serial killers possess. Ask any shrink. These people inherit the lack of emotion in high risk situations. You admire this stuff?
Now who is equating correlation to causation?
This stuff may be fun but it’s not science.
CNBC sucks,
Right on! LOL!
March 21st, 2009 at 4:28 pm
AGG Said:
March 21st, 2009 at 4:20 pm
2) There’s a fellow named Kuklinski (the ice killer) in prison who also has the “nerves of steel” type traits that traders so celebrate. It’s a genetic DEFECT most serial killers possess.
question:
———————–
So some traders are genetically defective serial killers? Makes sense to me.
March 21st, 2009 at 4:33 pm
Another bullshit post to pacify the crowd, while Rome is burning. Who’s money are they dealing with anyway? It doesn’t appear to be their own. Oh, ya that’s a whole different story, aint it! Fuck all of you ringside traders, pull your pants down and realize that your’s are someone else’s. Gee, it must be fun.
March 21st, 2009 at 4:47 pm
dead hobo,
Google the ice killer. He didn’t have your education or opportunities but he did get to live a nice life in New Jersey when he wasn’t otherwise occupied. He’s agreat family man too. His family had no idea and he always fiecely protected them (good Catholic school for his daughter) . In other words, he was, for all practical purposes, just surviving in this big bad world that he didn’t make and can’t change. Sounds like your philosophyof life, doesn’t it? But then, you aren’t a criminal, are you?
March 21st, 2009 at 4:48 pm
Bueller?
When someone mentions Bueller, I think of Voodoo Art Laffer. And when I think of Art Laffer, I think of Hell resident Jude Wanniski. Here is presumably granola-eating, fine-wine-drinking, meat-avoiding, Vermont-to-West Coast pinko liberal Thom Hartmann stealing registered Republican The Great CNBC Sucks’ ideas on how we got here: http://airamerica.com/thomhartmannpage/blog/2009/jan/26/two-santa-clauses
Never mind the twenty years I wrote earlier. The trading game must be RIGGED for thirty years to artificially preserve the status quo while the world tries to work with us to repair an America that was destroyed by Larry Kudlow and Art Laffer. Never mind zombie banks, we are economically a zombie nation. America needs a Democratic-led soft landing in a globalized economy over the next three decades. If by chance the Republicans take over between now and then, go long cyanide pills. You won’t have enough bullets to fight off the hungry crowds.
March 21st, 2009 at 4:54 pm
RW,
I believe the geeks have had a belly full of the “joe college” type running the show. WE are about to get ,not agressive (that’s their thing), but passive agressive. The cocaine, thrill a minute, genetic troglodytes won’t know what hit them. We are going to but wimp juice in the water. Hell even karen might start invest ing in charities rather than stocks if she drinks it (that’ll be the day).
March 21st, 2009 at 5:11 pm
Barry,
That stuff I wrote about Carnegie is historically accurate. He did work negroes to death in the southern coal mines he purchased in the late 19th century. This guy is idolized by a bunch of ignorant people out there for his philanthropies. It’s bullshit. He gave from his predatory excess and not much at that. Why don’t you let this stuff through? It’s germaine to the “aggressive = Successful” meme (a false meme).
March 21st, 2009 at 5:15 pm
Begs the question Barry: just how long is your ring finger?
March 21st, 2009 at 5:18 pm
Do I need to shorten BOTH index fingers?
March 21st, 2009 at 5:58 pm
AGG Said:
March 21st, 2009 at 4:47 pm
dead hobo,
… But then, you aren’t a criminal, are you?
question:
————————–
Maybe I am and maybe I’m not. Hoo Hoo Hoo. Who’s on the menu tonight??
March 21st, 2009 at 6:50 pm
So what is wrong with Leisman?
March 21st, 2009 at 6:55 pm
Morte Mendicus,
“If the world’s population had
the productivity of the Swiss,
the consumption habits of the Chinese,
the egalitarian instincts of the Swedes,
and the social discipline of the Japanese,
then the planet could support many times its current population without privation for anyone,” wrote Lester C Thurow in the very different world of 1986.
Unfortunately, we have a preponderance (at least at the top) of dead hobos with gold idols in there basements inscribed with the words, “The Number” on them. Down in the Philippines you have whole communities of people “living” on top of garbage dumps scavenging whatever they can while breathing all that fresh air. This is our future with the Testosterone Toughies in charge. The agressives will, of course, live upwind of the garbage dump but have a nice view of it so they can watch their employees.
In a way, this is all kind of fun. Sort of like dancing on the edge of a volcano, right Mr. hobo? How’s the view, karen?
March 21st, 2009 at 7:00 pm
Bruce in Tn,
The same thing that’s “right” with Cassano from AIG.
How’s the view in Tennessee coal? It ain’t as good as West Virginny but you all can still build a nice mountain top house on one of those “terraformed” hills. They do have hills above those caves in Tennessee, right?
March 21st, 2009 at 8:28 pm
My ring fingers are both seriously longer than my index fingers. Maybe I should start aggressively trading other people’s money.
If you the government’s got your back, you ain’t risking shit.
March 21st, 2009 at 9:11 pm
Testosterone will get you into trouble more often than not. What traders need is not to trade. We need a link to a testosterone reduction site.
The survey was using the wrong sample. In my view the smart money has to be with people who trade sparingly, coolly and systematically. Soros chastised himself this year for over trading and failing to catch the big moves.
I think a hunter analogy is better. The best allocation of effort is to the really big game if its there. For that patience planning and skill are the required elements. Even eunuchs need to eat
March 21st, 2009 at 10:08 pm
@AGG:
Yes, they do have terraformed mountain tops, and in my opinion, it is too easy to take the tops off some of these mountains while mining coal…They have many examples about 60 miles from where I live…
Had a neat experience today…the NPS guided us through a controled burn of 7000 acres after our hike in the Great South Fork today…very interesting….they drop golf ball sized napalm from a helicopter to start the controlled burn…got some great pictures…fire all around..
I am not against the mining of coal, but they do leave some of the mountains in rough shape when they finish…and that should never be allowed..
March 21st, 2009 at 10:26 pm
Traders with polydactaly find it easier to type…
March 21st, 2009 at 10:58 pm
According to this I should be rich, apparently they left out the bit about dropping from the right vagina.
March 21st, 2009 at 11:11 pm
Ahhh…..
Back from six days without phone, internet, or TV……
Amazing.
What a cleanse.
And then I see this post. Is there anyone with a ring finger shorter than his index finger? WTF kind of study is this. Is this a joke?
I would say, though, that some very good poker players are also very good traders. It’s an incredibly similar endeavor. I’ve had the privilege to work with and hang out with some large trader types and I can say they all have very similar genetic makeup…and high levels of testosterone is DEFINITELY a common characteristic.
March 21st, 2009 at 11:32 pm
Well, I just did some “dumpster diving” in my spam folder, and ordered up some “ring finger enhancer”….bet I’ll be up 30% for the year, np…..
March 21st, 2009 at 11:41 pm
Crack pot science like this is why people are unable to thoroughly comprehend science and why there’s an apathy for basic science in this country. What about testing cause and effect? This is just shitty correlation studies.
“He found that traders with a longer ring finger than index finger made more money…..Exposure to high levels of testosterone before birth appears to make men more sensitive to the hormone as adults. In addition to playing a role in sexual functioning, testosterone has been associated with aggressive behavior and enhanced risk taking, and has been shown to predict performance in certain competitive sports ”
Do high testosterone levels cause ring fingers to be longer than index fingers?
The paper was published in PNAS in 2008. Clearly not reproducible, I wonder what his “findings” would be if he did the research in the last quarter of 08.
March 21st, 2009 at 11:58 pm
super_trooper says it, this story is old, and, worse, should have remained in the Landfill..
in addition, when is 44 is significant sample size? I guess they couldn’t use Africans as guinea pigs for this ’study’..
http://www.iol.co.za/?set_id=1&click_id=125&art_id=vn20060318093619658C180804
AT,
good to see you made it back, nice to remember what is is to be Human(sans EMF overload), no?
March 22nd, 2009 at 12:06 am
Andy, welcome back! I posted music for you the other evening thinking you were looking in; glad you got away, though. BTW, I’ve played poker with some professionals and won, but i think the dealer liked me : ) Listen to my new music and report back, pls.
http://www.myspace.com/anthonygreen
and here’s a darling, off-the-bus, acoustic session: http://www.youtube.com/watch?v=2pHITqLJ6T0
i downloaded the album “Avalon” from itunes and didn’t discard a single song for my playlist…
March 22nd, 2009 at 12:21 am
Hoffer. Definitely feels good to detach. I was in an amazing place….battling nature…..exuding high amounts of testosterone….No trading…just mono y mono with nature. We battled to a draw….
What an interesting week I missed…..Can’t believe Big Ben pulled out the Nuke Attack on the Treasuries.
When the Epilogue to this whole disaster is written, that action will be on “Ten Things We Wish We Hadn’t Done to Address the 21st Century Credit Bubble Implosion.”
For me, the Fed buying Treasuries was truly the “nuclear option.” If they ever did it, I thought it would be a full admission that things were completely out of control…and then they did it! Amazing.
How does it work when a sovereign nation can print its own money to fund it’s own debt spending? It astounds the mind that they actually went in that direction. It would have been better to have simply “set” the home mortgage rates at 4% and called it a day. The 30 year bond would eventually trade above the “set” rates, but at least the Nation’s lenders would know that we were just directly subsidizing home buying fully, and NOT monetizing the outstanding debt.
Just reading the headlines from the week that was….THAT was the game changer.
March 22nd, 2009 at 12:44 am
@ karen, I hope you’re not one of the groupies in green behind Anthony Green.
March 22nd, 2009 at 12:53 am
@karen.
Ok…..
Listened through a lot here…giving you the benefit….
I have to say…Anthony Green is “ok.” I much prefer the G. Love stuff and even that funky little band out of Austin with the female lead singer (name escapes me tonight). Green has a nice pitch for certain types of songs for sure, but I must admit I couldn’t listen to more than 20 minutes of it in a row. Perhaps I haven’t heard his best stuff….maybe I’m not in the right frame of mind….not sure….it’s definitely good, but not something I would drown myself in for hours in a row….
But thanks anyway for expanding my horizons, if only for a temporary moment in time….
March 22nd, 2009 at 12:56 am
super_trooper, LOL, they are chunky and dull looking, aren’t they… nope, my concern is being too thin…
andy, you were away when I posted this, hopefully not smoking crack:
karen Says:
March 19th, 2009 at 12:25 am
anyone that didn’t see today as fait accompli was smoking crack as far as i’m concerned…
i’ve got so many friends here at tbp, i’ll just keep up the good work, i guess…
March 22nd, 2009 at 1:01 am
AT is back!
March 22nd, 2009 at 1:12 am
karen,
Keep up the good work~
AT,
personally, I think BenBer front ran his own move by getting long the 0’s the BEP is gonna need to represent the paper aspect of his “QE”..too bad it isn’t easier to get long these catz: http://www.crane.com/navContentProduct.aspx?NavName=AboutUs&DeptName=Overview
http://www.bep.treas.gov/
IOW, these Keynesian-indoctrinated Jackals are fixin’ to eat what’s left of the corpse that was the U. S. of A. ..
March 22nd, 2009 at 1:21 am
Andy, drown is a good word… i have drowned myself in HOURS of it, trade with it, sleep with it. I’m getting the idea that the “sad” element doesn’t resonate with you… that’s a good thing. I find Anthony soothing and enlivening at the same time.
That female singer is my niece, btw, Jessica… the band is The Lings, http://www.myspace.com/thelingdom
They had a small show in Hollyood last month and spent 9 days with me… i know them all now.
March 22nd, 2009 at 1:24 am
mark, you are on my bad guy, practically ignore list, btw… you haven’t quite made it to ignore, but once you do…
March 22nd, 2009 at 1:33 am
karen.
yes. they were definitely talking about buying treasuries for sure. I thought they were just “jawboning” to keep the longer term rates lower. However, I did some work on the 10 and 30 year before I left. After looking at the charts, it became clear that another leg up on the 10 yr note was a decent probability….
It was really a strange analysis from several days ago….I was seeing patterns that certainly hinted at DX weakness, “risky assets” rally, and 10 year note strength, which is an ODD combination if you’ve been following these markets. In retrospect, the charts were telling us what was coming….”sometimes the hardest thing is believing what you’re seeing.”
I didn’t believe what the charts were telling me because the act of the Fed buying Treasuries is SOOOO crazy, it was difficult to comprehend it becoming reality.
March 22nd, 2009 at 1:44 am
karen. Jessica is certainly the best part of that band….congrats. great voice.
What an OT thread this has become…..Oh well…Spring Break.
March 22nd, 2009 at 1:46 am
AT,
though, more importantly, aren’t vay-kays, like you described, the best?
I never understood the dude w/ RIMM on the Beach, at the Park, on the Course, elaewhere, b*thching about ‘lack of signal’..
karen,
do spill..por que?
March 22nd, 2009 at 1:50 am
Andy, I make so, so many mistakes… but the one thing I KNEW is that they would by treasuries… I also play against the charts in disbelief , a 50-50 proposition most times… we’ll see, we’ll see. I need another week to make a plan…
March 22nd, 2009 at 3:25 am
@Karen: Lings good. Very good.
Still tugging on my ring finger.
March 22nd, 2009 at 9:32 am
Phoenix, lol. glad you like the Lings. : ) i love their music, listen to it everyday, and can’t wait for new stuff… sweet and personable young people, too. a difficult, if not impossible, business to make a living in, however.
March 22nd, 2009 at 12:40 pm
@karen: We seem to be on exactly the same clock. What kind of wierdo are you? :>)
March 22nd, 2009 at 2:46 pm
Here’s another way to look at them:
Snakes In Suites: When Psychopaths Go to Work
Paul Babiak, Ph.D., and Robert D. hare, Ph.D
http://www.amazon.com/Snakes-Suits-When-Psychopaths-Work/dp/0061147893/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1237747552&sr=8-1
March 22nd, 2009 at 11:29 pm
Very late in this thread, but here it goes anyway.
@karen: guess we’re off the clock, but try this. A friend sent it weeks ago, but it’s still good.
http://www.youtube.com/watch?v=y3G_gViM9OU&feature=related
March 23rd, 2009 at 1:37 am
phx, i’ve seen a few skits by those two… very good, i agree… off the clock! gotta get to bed… thanks.