Men who have a shorter index finger relative to their ring finger proved to be better at high-stakes, fast-paced stock trading than men with relatively longer index fingers, according to a new study.
John Coates, the lead author on the stock trading study, published yesterday in the journal Proceedings of the National Academy of Sciences, was initially uncertain that digit ratios would tell him anything useful.
"I didn't put much stock in it to tell you the truth, until I saw the results -- I almost fell out of my chair," said Coates, of the Judge Business School and department of physiology, development, and neuroscience at University of Cambridge, England.
In the study, researchers measured the right hands of 44 male stock traders who were engaged in a type of trading that involved large sums of money, rapid decision-making and quick physical reactions.
Over 20 months, those with longer ring fingers compared to their index fingers made 11 times more money than those with the shortest ring fingers. Over the same time, the most experienced traders made about nine times more than the least experienced ones.
Looking only at experienced traders, the long-ring-finger folks earned five times more than those with short ring fingers. Coates said he turned to the digit ratio because he was searching for a convenient marker for a person's sensitivity to testosterone.
More accurate physical markers of testosterone sensitivity include a measurement in the inner ear, and the "ano-genital" distance, but Coates thought stock traders were more likely to offer up their hands to measurements than their rear ends.
Exactly how or why is unclear, but studies have shown the relative length of the ring finger is related to the amount of androgens (testosterones) present in a baby's body during the 8th to 19th week of pregnancy.
Girls may have some testosterone during that time, but the hormones surge through boy's bodies.
"When they do so, they basically create the male body and brain," said Coates. "It affects your body, your metabolism, the structure of your bones."
The higher the testosterone level during that crucial time, the more likely the ring finger will grow, and the more sensitive the brain is to testosterone for life, said Coates.
To find your digit ratio, divide the length of the index finger (called the 2D or second digit) by the length of the ring finger (called the 4D). It's easiest to measure from the crease of the finger at the palm to the tip.
Large surveys have shown that men tend to have lower digit ratios (short 2D and long 4D) and women tend to have a ratio of 1 or greater.
Coates, who used to run a derivative trader desk on Wall Street in the dot-com boom era, is in the midst of a long investigation into how testosterone affects market behavior. The digit ratio study may be only one in a series of investigations.
"During the dot-com bubble I was convinced there was some chemical in people's bodies that were making them go nuts. They were manic, delusional; they had diminished need for sleep," said Coates. "It got me thinking that there was some chemical affecting these people."
Coates has done previous studies (without digit ratios) measuring blood testosterone and trading performance. He hypothesizes a cycle of testosterone-fueled winning streaks and subsequent over-confidence contributes to stock market bubbles.