Why The Girl In Trading Is Better Than Everyone Else

GMngmt's picture
Rank: Senior Orangutan | 488

"There she is, that beautiful blonde from Wharton", you say to your colleague as she comes in. She looks amazing and smells great despite being the only female in the trading pit. Yet she has a character of class, trades gracefully, and a strong resilience. After some time of trapping flies with your mouth, you stop gawking as your colleague leans over and says, "...not only is she like a nine, I've heard she's the best trader at her firm!" You give a sudden and noticed, "What?" Its true, research shows in fact that females are better at trading than males but now a famous London HF manager prefers them and a renowned Forex trader gives her insights as to why...


Lex Van Dam, a former GS trader, Partner at Hampstead Capital HF, and notably from the BBC series Million Dollar Traders bluntly puts it,

...females tend to be statistically better traders than males."

Where does he come off saying this? Two reasons...

1. Single men can be very overconfident in their ability, "...in areas such as finance, males are more overconfident than females."
2. Women trade less frequently, 45% less yielding a gain of +.93% return over men.

Van Dam goes on to say that, "...there is no difference between the analytical ability of male and female traders." He also thinks that in ten years there will be many more female traders on WS given the past financial crises.

What do you think the implications of a co-ed trading industry would be?


ForexDiva, Kiana Danial supports Van Dam's reasoning saying that females have the unique talent of multi-tasking while waiting for trades to materialize. They also admit mistakes easier and don't have an alpha-male complex as she says,

...most of the losses in Forex trading come after huge success."

She goes on to cite two studies, to support her own statements that females are more risk averse and that female overall investment performance is superior to males.

1. A New York Times article titled, How Men's Overconfidence Hurts Them As Investors gives a summary of a few different studies on why females are more risk-averse.
2. According to a Vanguard Investment Counseling and Research study of 100K portfolios, females outperformed males by 7% in the period from 2008 to 2009.

For a further scientific explanation read, Women Make Better Investors Than Men, But Why?

Women, do you feel you have any other natural advantages that men do not?


Does any of this sound familiar? It should. Chabo11 posted on May 16th , Are Women Traders Better Than Men on a Time magazine article by Gary Belsky who cited a Quarterly Journal of Economics piece by Brad M. Barber and Terrance Odean from 2001. Coincidently, the supporting claims I used in Van Dam's reasoning were pulled from that same study. Also, counter to chabo11's perspective, I've vindicated reasons number one and five of their claims. However, I must confess that I did find all of this ex ante of their post and to conclude, my last question is men, what's your opinion on all of this? If you disagree, then let's hear it!

Comments (38)

Sep 23, 2012

Let's say hello to the shit-show, brethren.

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Sep 23, 2012

I think it comes down to risk tolerance. Its the same idea as to why stock brokers cold call only men and ignore women. Men are more greedy.

Sep 23, 2012
fearless:

I think it comes down to risk tolerance. Its the same idea as to why stock brokers cold call only men and ignore women. Men are more greedy.

What cave did you crawl out of, amigo ? Men are more greedy ? That's so silly. Women are the greedy bunch. Women lie, cheat, and steal in a frenzy. Do you honestly believe Marisa Mayer, Yahoo's new CEO is worth the $120 MM her compensation package is ?

What about that JP Morgan clown Ina Drew who quit with $30 MM in her pocket (two years comp.) after losing her bank over $2 Bn. Very convenient for her. You get a bitch like that sucking you high and dry and you're gonna bite the dust.

Grow up, kid.

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Best Response
Sep 23, 2012

take the % of women of the total population, who are traders, then take the same top % of men of the total population, in trading, and see who gives the better PNL.

Then list every fucking scientific and economic development in the past 10 millennia...

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Sep 23, 2012

Given that it is coming out of the mouth of Lex Van Dam, I would discredit everything that he mentioned.

Sep 23, 2012

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Sep 23, 2012
SonnyZH:

http://www.guardian.co.uk/business/2011/apr/24/gle...

Is it bad I agree with simon murray

My drinkin' problem left today, she packed up all her bags and walked away.

Sep 23, 2012

Basically, from a business perspective, what I am getting is, in a nutshell, with all due respect, I personally think, after we put it all together, the fact of the matter is, when it is all said and done, at the end of the day, net net bottom line, ultimately,

It is what it is.

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Sep 23, 2012
BTbanker:

Basically, from a business perspective, what I am getting is, in a nutshell, with all due respect, I personally think, after we put it all together, the fact of the matter is, when it is all said and done, at the end of the day, net net bottom line, ultimately,

It is what it is.

This,

Sep 23, 2012

I'd like to add, for the record, that women who are in trading develop and display the same "alpha-male factor" you'd ordinarily see in men. Traditional gender differences blunder on the trading /execution floor. Bitches get just as aggressive, controlling, and "over-confident" as any guy doing that same job. That's what Ms. Forex Diva is not telling you. She knows the public as an outsider has no idea of it.

Sep 23, 2012

Women need to overcome more hurdles to become traders.

Obviously the average women trading is better.

Sep 23, 2012
Zafrynex:

Women need to overcome more hurdles to become traders.

Obviously the average women trading is better.

This is what I figured while reading the article. Still though, interesting. As someone who has no experience in trading, I can't prove anything the study said is false

Sep 23, 2012

It doesn't take a medical doctor to know that females (physiologically) are far more risk-averse than males. That doesn't make them the best performing traders, but it sure as hell doesn't make them go all rogue the way that UBS trader did.

Sep 23, 2012

I think that both sexes are adequately base, immoral and duplicitous.

Sep 23, 2012
GMngmt:

Single men can be very overconfident

Is it because single men just don't have a woman by his side to crash his dignity and humiliate the shit outta him 24/7?

Sep 23, 2012

I would like to see this study applied to professional traders only, and I am interested to see how the results change when compared to the rest of the population.

I have seen this or similar studies before, but they are usually based of a sample of the general population, encapsulating Joe Bloggs who is managing his own finances, with little to no finance knowledge or training. If you conduct an experiment where a pool of non-finance employed men and women were trading, I would not be surprised in the slightest to see that the women outperform, due to the lower risk tolerance that is mentioned above.

However, I think that if you conducted the same study on professional traders, there would generally be no statistically significant relationship between performance and gender.

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Sep 23, 2012

Scientifically they certainly have an advantage in multi-tasking with far more neurons connecting across the brain. Women have more white matter than male's grey matter. When problem solving different areas of the brain light up - for men usually one key area, women tend to use more "whole brain" activity (because we have more grey matter and they have more connections).

Other studies have shown companies that add females to the BoD have higher profits than all male BoDs. Females have higher group problem solving than either all male, or mixed groups, and as noted above perhaps an, on average, better ability to judge risk vs. reward. And, lastly, female managers with children tend to be far better at coaching and developing "star" employees.

What does this mean? Don't be a jackass and treat both genders with respect. There are equal studies showing where men excel and how. So many of the kids on this board seem to be just that...the real world isn't quite so simple, and if you're going to make it - male or female - you need to use the best traits of your gender and not discount anyone based on their sexual organs...instead, judge people on their results.

Sep 29, 2012
TylerT:

Women have more white matter

Yeeeeeeeeeeeeeeeeeeeeeeeeeaaaaaahhhhhhhhhhh

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Sep 23, 2012

I dont even know where to begin

Sep 23, 2012

bahaha I recognize that girl from the floor. She would wear like 9 inch high heels and had her name spelled out in glitter on the back of her jacket.

Sep 23, 2012

Of course women are better traders, they trade their sex for a house, car, and money through the options contract known as marriage.

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Sep 23, 2012
Nebular:

Of course women are better traders, they trade their sex for a house, car, and money through the options contract known as marriage.

Very Good !

Sep 23, 2012

because women are better gold diggers

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Sep 23, 2012
Interest.ed:

because women are better gold diggers

You bet !

Sep 23, 2012

It's when you know "she nailed it"!

Sep 23, 2012

in the macro world female PM/traders are few and far between. The couple that I have known I thought sucked but for reasons other then, and having nothing to do with, being female...I think if there is an advantage to being one gender or the other it is dwarfed by many many other less readily apparent traits.

Jul 30, 2015

Sep 23, 2012

To me this seems like a simple pull to par trade. The question is at what level of females does the redemption value begin to exceed the maturity value.....

Morpheus: Have you ever had a dream, Neo, that you were so sure was real? What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world?

Sep 23, 2012
honeyoak87:

To me this seems like a simple pull to par trade. The question is at what level of females does the redemption value begin to exceed the maturity value.....

You're in the market for a round lot, I guess. You want the shortest duration bonds. I'm more interested in embedded options.

Sep 24, 2012
Financier4Hire:
honeyoak87:

To me this seems like a simple pull to par trade. The question is at what level of females does the redemption value begin to exceed the maturity value.....

You're in the market for a round lot, I guess. You want the shortest duration bonds. I'm more interested in embedded options.

aah yes.... but they are a bitch to hedge...

Morpheus: Have you ever had a dream, Neo, that you were so sure was real? What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world?

Sep 24, 2012

men are better than women at everything except bearing pain

you are out of touch with reality if you think otherwise

Sep 24, 2012

Is anyone here a female trader or does anyone here work with female traders? I'm curious to know what people actually in the business have to say about this.

Sep 24, 2012

Wow so some risk averse people did 7% better in 2008-2009 on average. Amazing.

"...all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

  • Schopenhauer
Sep 24, 2012

How fucking stupid is this? A comparison like this can really only be made once you have relatively equal numbers of men/women on the floor.

Does anyone even understand a bell curve distribution of abilities?

Sep 24, 2012

/agreed with some of the comments above...cherry picked info....sample sizes between men and women vary wayyyyyy too much to even try comparing. although, good for them, a few more women in the workplace is a good thing for making the place more aesthetic.

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Sep 29, 2012

tssk tssk tssk..why so angry? trust a bunch of men to get all bent out of shape because a study shows up that takes them out of their delusions of grandeur. One question though: why are you so insecure if you're so confident in your superiority?
the next couple of decades are going to be really harsh if you can't get with the times

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Sep 29, 2012
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Oct 1, 2012

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