Books and films often dramatize financial-market traders as macho gamblers. Now there may be scientific evidence to back up that pop-culture image: two researchers have linked testosterone levels to the success of traders in one London market. John Coates, a trader-turned-neuroscientist at Cambridge University, UK, started the study after what he saw during his time working the markets: floor traders became frenzied during big winnings, then deeply depressed during downturns. “It was sort of classic manic behaviour,” he says. He says that he began to suspect that hormones, specifically testosterone, might be involved because the few female traders appeared to him to be “relatively unaffected”.
To find out, Coates and his Cambridge colleague Joe Herbert followed 17 male traders for 8 consecutive business days at a firm in London. The researchers took saliva samples from the group before and after the bulk of the day’s trading. They analysed the levels of two hormones: testosterone and cortisol, a hormone that is produced in response to uncertainty. The results, appearing today in the Proceedings of the National Academy of Sciences, were clear according to Coates: “Traders had an above-average gain on the days their testosterone was above average.” In 14 out of the 17 cases, the traders earned more money on days they had elevated morning levels of the hormone.