Why trading is done by men

Well, if this study points out that the stock exchange is ruled by men, would you trust your stocks trading to a female trader?

Just asking.

Read on...
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Testosterone an elixir for stock market success

WASHINGTON - The most successful stock traders have higher levels of the male hormone testosterone, providing a dramatic boost to their confidence and drive, according to a British study published Monday.

Researchers at Cambridge University found that testosterone also appears to increase traders' appetite for risk-taking a quality likely to enhance the performance of those who earn a living in the high-stakes world of the stock market.

"Market traders, like some other occupations (such as air traffic controllers), work under extreme pressure and the consequences of the rapid decisions they have to make can have profound consequences for them, and for the market as a whole," said Professor Joe Herbert, Cambridge Center for Brain Repair, one of the researchers on the study, which was to be published Monday in the Annals of the National Academy of Sciences.

The researchers also noted that success fueled by testosterone feeds itself, in part because it leads to the production of even more testosterone.

In male athletes, for example, testosterone levels rise prior to competition, and rise even further in a winning athlete, but decrease in a losing one.

The phenomenon called the "winner effect," can increase confidence and risk-taking and improve chances of winning yet again, in a positive feedback loop.

"Hormones may also be important for determining how well an individual trader performs in the highly stressful and competitive world of the market. We are now exploring this in much more detail," the researchers wrote.

The study followed 17 male traders in the City of London for eight consecutive business days.

To measure the traders' hormones, they took saliva samples twice per day at 11:00 am and 4:00 pm, times that fell before and after the bulk of the days trading. At each sampling time, traders recorded the traders' profits and losses for the day.

They found that daily testosterone levels were significantly higher on days when traders had a higher than customary daily average.

On the down side however elevated testosterone may explain why stock traders sometimes make irrational choices that lead to bubbles and crashes.

Researchers speculated that if testosterone levels continued to rise or became chronically elevated, it could prompt traders to engage in reckless risk-taking and undermine their profitability.

They noted that earlier studies have linked administered testosterone to impulsivity, sensation-seeking and harmful risk-taking.

Dr. John Coates, lead author of the study said: "If testosterone reaches physiological limits, as it might during a market bubble, it can turn risk-taking into a form of addiction."

Coates, himself a former trader, added: "At times like these economics has to consider the physiology of investors, not just their rationality." - AFP/ar


From ChannelNewsAsia.com; source article is below:Testosterone an elixir for stock market success
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Rising oil, commodity prices pull US stocks higher

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06/30/2009 | 07:33 AM

NEW YORK – A jump in oil prices sent investors rushing to put money into the stock market in the final days of the second quarter.

Energy, industrial and materials stocks pulled the market higher in light trading Monday as investors raced to keep up with the gains in oil.

Crude rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform.

With the quarter's end coming up on Tuesday, some money managers were making last-minute adjustments to their portfolios just ahead of issuing quarterly reports to their clients. A benchmark against which many funds are compared, the Standard & Poor's 500 index, is up 16.2 percent since the start of the April-June quarter.

Analysts cautioned against seeing the upswing as a sign of conviction among investors that it was time to move into the market ahead of an economic recovery. Stocks seesawed in the early going but jumped after oil gained.

After running the S&P 500 index up 37 percent since March on a litany of "less bad" economic data, investors have become more cautious about the pace of the economy's recovery this month and are looking for more concrete signs of growth.

The Dow Jones industrial average rose 90.99, or 1.1 percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9 percent, to 927.23, while the Nasdaq composite index rose 5.84, or 0.3 percent, to 1,844.06. Stocks ended last week mixed.

There was little economic news Monday but the week, which is abbreviated by the Independence Day holiday on Friday, brings key data that could give investors a better sense of where the economy is headed.

Of particular importance is the monthly employment report due out Thursday. Though considered a lagging indicator of the country's economic health, the unemployment rate is still one of the most closely watched gauges of the economy. The labor market is intricately tied to many facets of the economy including consumer spending.

Investors also will get reports on consumer confidence and manufacturing this week.

The Dow is up 30.3 percent from a 12-year low on March 9, though it has fallen 3.1 percent from a five-month high on June 12. The blue chips are now down only 2.8 percent in 2009.

Harry Rady, chief executive of Rady Asset Management, is concerned that although the market's rally has lost steam in the past three weeks traders are still too optimistic about how quickly the economy can recover.

"I see a bit of complacency creeping into the market," he said. "The market has run up and that has the inverse effect of what it should."

Rady sees trouble in the continuing retreat of a gauge of fear in the stock market, and contends that investors are overlooking danger spots in the economy like heavy debt loads and weakness in the dollar.

The Chicago Board Options Exchange Volatility Index, or VIX, is a measure of stock market volatility that has been easing since early March. The VIX is down 37 percent in 2009 and stands below 26. The historical average is 18-20. It hit a record 89.5 in October at the height of the financial crisis.

Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to a light 4 billion shares compared with 5.1 billion traded Friday. Volume was heavy Friday because of the annual reconstitution of the Russell 3000 index forced investors to make changes to their portfolios.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.48 percent from 3.53 percent late Friday.

The dollar was mixed against other major currencies. Gold prices fell.

The gains in commodities lifted energy, industrial and materials stocks. Exxon Mobil Corp. rose $1.53, or 2.2 percent, to $70.58, defense contractor General Dynamics Corp. rose $1.54, or 2.8 percent, to $57 and Eastman Chemical Co. rose $1.38, or 3.7 percent, to $38.79.

Shares of Ford Motor Co. rose 17 cents, or 3 percent, to $5.78 after the automaker's top sales analyst said US auto sales might have stopped their month-to-month slide in June and could be down less than 30 percent for the first time since September. Automakers, which are expected to report June sales in the US on Wednesday, have been hit by a 37 percent drop in sales in the first five months of the year.

In other trading, the Russell 2000 index of smaller companies fell 2.61, or 0.5 percent, to 510.61.

Overseas, Britain's FTSE 100 rose 1.3 percent, Germany's DAX index advanced 2.3 percent, and France's CAC-40 rose 2 percent. Japan's Nikkei stock average fell 1 percent. - AP

From GMANews.tv; see the source article here.

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Market panic: Wild gyrations, risks and opportunities in stock markets

BRAIN FOOD

Stephen Vines

Should investors be dumping stocks just because it's a recession?

No, as there are always chances to take advantage of the downturn, says author and successful businessman Stephen Vines.

In Market Panic, Vines, a former journalist whose Hong Kong-based company Pan Britain provides consultancy services to major corporations in East Asia, takes a hard look at current trends and offers simple tips for succeeding in volatile markets.

He challenges some long-held theories about the benefits of investment diversification; offers new ways of understanding the panic cycle and teaches investors how to predict the onset of panics.

"Stock markets show remarkable resilience in the face of crises, scandals and all other forms of extreme behaviour," Vines writes. "If more people understand the opportunities arising from markets at their supposedly weakest moments ... the potential for profit is greater than when fear, irrationality and extreme behaviour dominate stock markets."

Vines provides real-life case studies by interviewing fund managers and traders, who tell how they were caught in market panics and how they countered these challenges head on.

The book is easy to follow and jargon-free, perfect reading material for the budding investor. ZUL OTHMAN

From TODAY, Business – Monday, 01-Jun-2009

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