'Market affects city trader mood swings'

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London, Apr 15 (UNI) High testosterone levels means more money! A study of London traders reveals that high testosterone levels equals more money but also shows that the mood swings behind market bubbles and crashes may be influenced by testosterone along with another hormone cortisol, linked with uncertainty in markets.

Dr John Coates lead author of the study, warns that a real danger in the present credit crisis is not merely the extent of the market's fall but its duration.

The longer volatility stays high, the greater the cortisol exposure experienced by traders, and this can lead to a condition psychologists term "learned helplessness" when they avoid every risk.

To measure the traders' hormones, the doctors took saliva samples twice per day times that fell before and after the bulk of the day's trading. At each sampling time, traders recorded their profit and loss.

The researchers report in the Proceedings of the National Academy of Sciences that high testosterone at the end of the day correlated with success, but that high morning testosterone predicted greater than usual profit, with levels significantly higher on days when traders made more than their one-month daily average than on other days.

However, the scientists warn, extreme testosterone levels can make someone unable to assess risk, and prone to impulsivity and sensation seeking, and this 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.

"The new work," Dr Coates says, "a better way to lower extreme levels of testosterone or increase oestrogenic effects on a trading floor is to hire more older men and more women." UNI XC NC HT1600

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