TUESDAY, Jan. 13 (HealthDay News) -- The ratio of the second to the fourth finger, a marker of prenatal testosterone exposure, in male high-frequency financial traders predicts their long-term profitability, according to research published in the Jan. 13 issue of the Proceedings of the National Academy of Sciences.
John M. Coates, Ph.D., and colleagues from the University of Cambridge in the United Kingdom measured the second-to-fourth digit length ratio, a surrogate measure of prenatal androgen effects previously shown to predict success in competitive sports, in 44 male traders working in London's financial district. The traders were engaged in "noise" or "high-frequency" trading, which requires risk-taking, heightened vigilance and quick reactions, according to the authors.
The researchers found that digit ratios and years of training predicted the traders' long-term profitability, with lower digit ratios associated with higher profits. The digit ratio also predicted the sensitivity of this profitability to higher levels of circulating testosterone and market volatility, the authors note.
"Our results suggest that prenatal androgens increase risk preferences and promote more rapid visuomotor scanning and physical reflexes," Coates and colleagues conclude. "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."
Abstract
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