Why The Girl In Trading Is Better Than Everyone Else

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
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!
 

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

[quote]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.[/quote]
 
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.

Winners bring a bigger bag than you do. I have a degree in meritocracy.
 

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.

 
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,

 

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.

Winners bring a bigger bag than you do. I have a degree in meritocracy.
 

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.

 
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?

 

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.

 

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.

 

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?
 
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?
 

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
 

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?

 

/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.

 

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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Who Am I? | See what GMngmt is all about at About.Me
 

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