For eight consecutive days, twice a day (at 11 a.m. and 4 p.m.), participants deposited a small amount of saliva into a vial which was analyzed for testosterone and cortisol levels. These were then correlated with profit-and-loss figures for the same times of day.
The study was conducted on a real trading floor, so the risks and rewards would be equally real. And, as best they could, the researchers timed it with a period of market volatility (namely one that immediately preceded and included key U.S. economic releases).
High testosterone levels were correlated with greater profitability, while higher cortisol levels (which rose as much as 500 percent during one day) correlated with uncertainty.
"These heightened levels of steroids have implications both for the economy but also for traders as well," Coates said. "Chronically high levels of steroids have a debilitating effect on the body."
As for the financial markets, manipulating traders' hormones so as to manipulate the economy is out of the question. But, Coates said, "I think you would find a very different financial system if there were more women and older men on trading floors."
The National Library of Medicine has more on testosterone.
SOURCES: John Coates, Ph.D., research fellow, Judge Business School, and department of physiology development in neuroscience, University of Cambridge, U.K.; Julio Licinio, M.D., chairman, department of psychiatry and behavioral sciences, University of Miami Miller School of Medicine; April 22-25, 2008, Proceedings of th
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