Friday, January 23, 2009

The Trader's Finger

John Coates, a research fellow in neuroscience at Cambridge University, recruited 49 male traders from a London trading floor for his study. These were futures traders who trade at a frenetic pace -- their holding period is typically measured in minutes (and sometimes even seconds!).

Coates found that traders with a lower ratio of index-finger to ring-finger length were both successful financially and more likely to last in the business, after controlling for a number of other factors, including experience and level of risk-taking.

The explanation? In men, a longer ring finger indicates a higher exposure to masculinizing hormones in the womb. That, in turn, produces a host of characteristics that are beneficial in this type of trading: increased confidence, higher risk preference, faster reaction times, etc.

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