Size matters for financial trading success: study

Mon Jan 12, 2009 5:07pm EST
 
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LONDON (Reuters) - In the testosterone-fueled world of financial trading, it appears that hormones do rule and size really does matter, British researchers said on Monday.

Their study found that experienced traders with the longest ring fingers made more than three times the amount of money as did their less well endowed colleagues.

The length of a person's ring finger relative to the index finger may be a measure of prenatal exposure to male sex hormones or androgens, which could boost the concentration and reflexes needed to make trades on sudden notice, they said.

So no matter how much a trader knows about markets, the key to winning trades may in large part stem from biology, John Coates and colleagues at the University of Cambridge wrote in the Proceedings of the National Academy of Sciences.

"The success and longevity of traders exposed to high levels of prenatal androgens further suggests that financial markets may select for biological traits rather than rational expectations," they wrote.

Previous research has also tied finger length to aggression, fertility, sporting ability and increased confidence and quickened reaction times, the researchers said.

In their experiment, the researchers studied 44 men from a trading floor in London, some of whom earned more than 4 million each year. All were involved in the kind of trading that involved rapid decisions and quick reactions.

After measuring the men's fingers, the researchers correlated the traders' profits and losses over the preceding 20 months and found that longer ring fingers predicted higher long term profits and how long he stuck it out in the business.

Experienced traders with the longest "ring" fingers -- the digit beside the smallest finger -- earned 828,000 on average compared to 154,000 for men with the shortest fingers, and average overall annual earnings of 537,000.

(Reporting by Michael Kahn; Editing by Maggie Fox and Ralph Boulton)

 
<p>A stockbroker points at a monitor during a trading session inside the trading hall of the Karachi Stock Exchange December 15, 2008. REUTERS/Athar Hussain</p>