Hormone levels affect performance of traders
Testosterone, the male sex 
mone, is well known for stimulating human performance to a significant extent. This fact was reaffirmed by researchers at the University of Cambridge who found out that high morning testosterone levels can considerably influence performance of traders to help them make more than just average profits.
The involved scientists hypothesized that testosterone has the unique ability of influencing confidence and risk appetite that augment performance of traders.
From News-Medical.Net:
The influence of steroids naturally produced in the body (specifically testosterone and cortisol) may also provide insight into why people caught up in bubbles and crashes often find it difficult to make rational choices, unintentionally exacerbating financial crises.
Testosterone is a steroid hormone which controls competitive encounters as well as sexual behaviour. Testosterone in male athletes, for example, will rise prior to a competition and rise even further in a winning athlete (but decrease in a losing one). This increase of testosterone in the winner can increase confidence and risk taking and improve chances of winning yet again, leading to a positive-feedback loop termed the ‘winner effect’. However, too much testosterone can have a detrimental affect on the ability to assess risk rationally.
In order to determine how hormone levels affect those working in the financial sector, the researchers followed 17 City of London male traders for eight consecutive business days. To measure the traders’ hormones, they took saliva samples twice per day at 11:00 a.m. and 4:00 p.m., times that fell before and after the bulk of the day’s trading. At each sampling time, traders recorded their profit and loss (P&L).
Dr. John Coates, lead author, said that increased testosterone and cortisol levels can allow city traders to take more risks than traders with low testosterone and cortisol levels.
Tags: cortisol, steroid hormone, Steroids, testosterone
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