04/23/2008 05:12 am ET | Updated May 25, 2011

Traders With Higher Testosterone Make (And Lose) More Money

Traders who start the morning with high levels of the hormone testosterone, produced in the testes, will probably make more money that day, a study found.

Testosterone creates feelings of confidence and encourages risk-taking that can lead to profit, while another hormone, cortisol, prompts risk aversion when markets are volatile, according to a two-week study of 17 London traders published in the Proceedings of the National Academy of Sciences.

In traders on a winning streak, testosterone will keep rising until the hormone eventually causes manic, irrational behavior, turning the boom into a bust, said study author J.M. Coates, a derivatives trader at Deutsche Bank in New York from 1996 to 2001, during the dot-com bull market.

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