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Second-to-fourth digit ratio predicts success among high-frequency financial traders.

ABSTRACT: Prenatal androgens have important organizing effects on brain development and future behavior. The second-to-fourth digit length ratio (2D:4D) has been proposed as a marker of these prenatal androgen effects, a relatively longer fourth finger indicating higher prenatal androgen exposure. 2D:4D has been shown to predict success in highly competitive sports. Yet, little is known about the effects of prenatal androgens on an economically influential class of competitive risk taking-trading in the financial world. Here, we report the findings of a study conducted in the City of London in which we sampled 2D:4D from a group of male traders engaged in what is variously called "noise" or "high-frequency" trading. We found that 2D:4D predicted the traders' long-term profitability as well as the number of years they remained in the business. 2D:4D also predicted the sensitivity of their profitability to increases both in circulating testosterone and in market volatility. Our results suggest that prenatal androgens increase risk preferences and promote more rapid visuomotor scanning and physical reflexes. 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.

SUBMITTER: Coates JM

PROVIDER: S-EPMC2626753 | biostudies-literature | 2009 Jan

REPOSITORIES: biostudies-literature

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Second-to-fourth digit ratio predicts success among high-frequency financial traders.

Coates John M JM Gurnell Mark M Rustichini Aldo A

Proceedings of the National Academy of Sciences of the United States of America 20090112 2

Prenatal androgens have important organizing effects on brain development and future behavior. The second-to-fourth digit length ratio (2D:4D) has been proposed as a marker of these prenatal androgen effects, a relatively longer fourth finger indicating higher prenatal androgen exposure. 2D:4D has been shown to predict success in highly competitive sports. Yet, little is known about the effects of prenatal androgens on an economically influential class of competitive risk taking-trading in the f ...[more]

PMID: 19139402

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Project description:ObjectivesTo explore whether random chance, weak research methodology, or inappropriate reporting can lead to claims of statistically significant (yet, biologically meaningless) biomarker associations, using as a model the relation between a common surrogate of prenatal testosterone exposure, second-to-fourth digit ratio (2D:4D), and a random indicator of good luck.DesignCross sectional study.SettingUniversity sports performance laboratory in the United States. Data were collected from May 2015 to February 2017.Participants176 adults (74 women, 102 men), including university students, faculty, and staff with no history of injuries, disease, or medical conditions that would affect digit length.Main outcome measures2D:4D, body composition parameters potentially influenced by androgens (bone mineral content, bone mineral density, body fat percentage), and good luck (using poker hands from randomly selected playing cards as a surrogate).Results2D:4D significantly correlated with select body composition parameters (Spearman's r s range -0.26 to 0.23; P<0.05), but the correlations varied by sex, participant hand measured, and the method of measuring 2D:4D (by photocopy or radiography). However, the strongest correlation observed was between right hand 2D:4D in men measured by radiograph and poker hand rank (r s=0.28, P=0.004).ConclusionsGreater prenatal exposure to testosterone, as estimated by a lower 2D:4D, significantly increases good luck in adulthood, and also modulates body composition (albeit to a lesser degree). While these findings are consistent with a wealth of research reporting that 2D:4D is related to many seemingly disparate outcomes, they are not meant to provide confirmatory evidence that 2D:4D is a universal biomarker of nearly everything. Instead, the associations between 2D:4D and good luck are simply due to chance, and provide a "handy" example of the reproducibility crisis within medical and scientific research. Biologically sound hypotheses, pre-registration of trials, strong methodological and statistical analyses, transparent reporting of negative results, and unbiased interpretation of data are all necessary for biomarker studies and other areas of clinical research.

Dataset Information

Second-to-fourth digit ratio predicts success among high-frequency financial traders.

Publications

Second-to-fourth digit ratio predicts success among high-frequency financial traders.

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