Untold relationship between financial traders and hormone levels

As per a recently concluded research by Israeli researchers, City Traders tend to gain more when it comes to average profits in the morning times when testosterone levels are high.

It was hypothesized by the involved scientists that the positive return for traders is simply because testosterone is believed to raise the level of confidence apart from raising the appetite for risk.

Testosterone is a steroid hormone that plays an important role in competitive encounters and sexual behavior. The 'winner effect', which is possible with testosterone, offers a unique ability to raise the chances of winning and winning on a repeated basis.

From News-Medical.Net:

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).

Using the trader's previous trading history, the scientists determined a daily-average to which they could compare the test results. They found that daily testosterone levels were significantly higher on days when traders made more than their one-month daily average than on other days.

The researchers also speculated that if testosterone continued to rise or became chronically elevated, it could begin to have the opposite effect on a trader's profitability by increasing risk-taking to unprofitable levels. Previous studies have shown that administered testosterone can lead to irrational decision-making. They believe that this is because testosterone has also been found to lead to impulsivity and sensation seeking, to harmful risk taking, and in extreme cases (among users of anabolic steroids) to euphoria and mania.

Dr. John Coates, lead author, remarked that the raised levels of testosterone and cortisol allow traders to take business risks. However, there may be addiction if the level of testosterone reaches physiological limits.