Thinking Tech

Testosterone roils financial markets, long ring fingers a telltale sign

Posting in Science

Long ring fingers are increasingly being identified with aggressive behavior and risk taking in financial markets. They indicate high levels of testosterone which some researchers link directly to economic chaos. by John Dodge

Andrew Nusca's Sept. 25 post has researchers positing that Neanderthals and early primates with long ring fingers may have chased skirts more than their fellow cavemen with shorter ring fingers. The researchers associated long ring fingers with a disinclination to be monogamus.

Some comments to his post are skeptical. Perhaps they don't know that several quite scientific studies link long ring fingers to aggressive behavior on financial trading floors not just in single bars or whatever they had thousands of years ago. I just reported a story on the topic for Securities Industry News.

Longer ring fingers suggest higher androgen levels in the womb which determine testosterone levels later in life. Androgen is the name for a group of steroid hormones which includes testosterone.

Prof. John M. Coates, Ph.D

The studies found that high frequency traders with ring fingers longer than their fore fingers took more risks and made more money. They also tended to be better athletes and able to make lightning quick decisions on the trading floor.  Pursuing multiple sexual partners would seem in the same ballpark of risk-taking as buying 20,000 shares of stock and dumping them 30 seconds later.

Prof. John M. Coates, Ph.D, of the University of Cambridge in the U.K. completed separate studies on the topic last year and in 2007 with compelling results. He compares high frequency traders to tennis players at the net whose success depends in part on athleticism and speed.

Coates plans to release two more papers on the impact of testosterone in financial markets this Fall. His previous work has been published in the Proceedings of the National Academy of Sciences.

Another study of 500 male and female MBA students at The University of Chicago and Northwestern University reinforced Coates' findings. It found women tended to pursue more risk-averse careers than men. The reason is male testosterone (comparatively low levels of testosterone are produced in women's ovaries).

We've long known men are more aggressive and open to risk-taking. These studies help explain why and identify the telltale physical characteristics. Coates hypothesizes that if more middle-aged men whose testosterone levels are in decline and women controlled trading floors, wild and markets swings might be less frequent and extreme.

Indeed, Coates goes so far as to connect recent market crashes and testostereone.

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John Dodge

Contributing Editor

Contributing Editor John Dodge has written for the Wall Street Journal, Boston Globe, PC Week (now eWeek), EDN, Design News, Electronic Business, Bio-IT World, Health-IT World, Lowell Sun, Haverhill Gazette and Newburyport Daily News. He is based in Massachusetts. Follow him on Twitter. Disclosure