Giving the finger to Harriet Harman: part 2
A recent study regarding the relative length of fingers as an indication of market floor trading success received some coverage in the newspapers, but to fully grasp the nature and implications of the study, it is necessary to consider the actual published article in the journal Proceedings of the National Academy of Sciences.
What the study considered (measuring on the right hand) was the relative length of the index finger (the second digit next to the thumb) and the ring finger (the fourth digit next to the little finger). The smaller the index finger is in relation to the ring finger then the lower the ratio for this study. This is referred to as the 2d:4d ratio. Thus a low 2d:4d ratio means that you have a smaller index finger compared to the ring finger. Basically, what the study demonstrated was that the lower the 2d:4d ratio the more money you made as a market trader. Those with low ratios made many times the amount of money that the others did, and were more likely to be in business for longer.
Low ratios are sexually dimorphic, (i.e. they are different between males and females) with male ratios typically shorter than those of females (i.e. the ring finger is likely to be correspondingly larger than the index finger, so that men generally will have lower ratios). This difference is established in children by 2 years of age. There are of course also differences within the sexes, and in a study by Professor Spector and others, first published online 28 September 2006 , it was postulated that women with a low ratio had greater sporting ability and it was suggested (although this of course would require a much wider study than was then undertaken) that it might even be used as an indication of potential sporting ability.
Whilst this recent study was unusual in trying to apply such considerations to market trading, it was following long already well established lines of study. Indeed, although the scientific methodology of the study was impeccable and compelling, the study had started by suggesting that a low 2d:4d would be beneficial to the traders’ ability, and as the study stated "Specifically, we predicted that traders with a lower 2d:4d would make greater long-term profits and would remain in the business for a longer period of time.", predictions which were made good by the study.
Before anyone considers that this starting point for a hypothesis was somewhat bizarre, it was not because it followed many previous studies regarding sporting ability and indeed studies of both humans and animals. None of this is because finger length is of any specific relevance in itself, but because it is a usually reliable indicator of the effect of androgens in the womb. Basically speaking, a lower 2d:4d ratio indicates higher prenatal testosterone exposure. That has an effect on the way the brain reacts to testosterone in the system. Therefore the only significance of the finger length is that in humans it is a reliable way of measuring such foetal exposure and consequent reaction to testosterone during life. In broad terms the higher the foetal exposure, the greater the sensitivity of the reaction to circulating testosterone. Many studies have demonstrated that may improve or increase reaction time, willingness to take risk and level of confidence, and likewise performance in competitive sports (football, rugby, etc). Thus what was anticipated was that market trading being a competitive sport, there would likewise be an advantage and an impact for the way testosterone was utilised in the system.
Next week we shall consider exactly what the study demonstrated. We shall then go on to consider the implications.