According to researchers at the University of Cambridge, City Traders tend to make more than average profits when their testosterone levels are high in the morning.

The involved scientists hypothesize that the positive return for traders is because testosterone is known to increase the level of confidence and appetite for risk-taking qualities.

Testosterone is a steroid hormone that facilitates the control of competitive encounters and sexual behavior. The ‘winner effect’ that is bought by testosterone has the ability to improve chances of winning and repeating that time and again.

From News-Medical.Net:

In order to determine how hormone levels affect those working in the financial sector, the researchers followed 17 City of London male traders for eight consecutive business days. To measure the traders’ hormones, they took saliva samples twice per day at 11:00 a.m. and 4:00 p.m., times that fell before and after the bulk of the day’s trading. At each sampling time, traders recorded their profit and loss (P&L).

Using the trader’s previous trading history, the scientists determined a daily-average to which they could compare the test results. They found that daily testosterone levels were significantly higher on days when traders made more than their one-month daily average than on other days.

The researchers also speculated that if testosterone continued to rise or became chronically elevated, it could begin to have the opposite effect on a trader’s profitability by increasing risk-taking to unprofitable levels. Previous studies have shown that administered testosterone can lead to irrational decision-making. They believe that this is because testosterone has also been found to lead to impulsivity and sensation seeking, to harmful risk taking, and in extreme cases (among users of anabolic steroids) to euphoria and mania.

Dr. John Coates, lead author, said that enhanced levels of testosterone and cortisol allow city traders to take risks. However, if the level of testosterone reaches physiological limits, it can lead to a kind of addiction.