Stephonomics

Men vs Women – Gender Wars in the Financial Markets

Styles differ but the one thing that remains constant is that traders are a special breed.

I was reading an article that discussed whether women made better traders than men. Women are more prevalent in financial markets than ever before which isn’t surprising because as little as 15 years ago they were almost non-existent in the male dominated field. Women began entering into the trading spaces as trainee/assistants just as men did.

In the late 1980’s and early 1990’s trading rooms were very much an unregulated environment. There was no mention of political correctness or sexual harassment. Traders said what they said and that was it, if you didn’t like it you left, if you couldn’t handle it you got fired so it was a difficult place to work for some people and particularly for women.

Some of the stronger women survived and proved they belonged, handling the situation and becoming solid team members. Over time things began to change and the trading rooms were subjected to the same rules and guidelines as other businesses. More women were seeking opportunities in the ever expanding business. In time they proved themselves to be as capable as their male counterparts.

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Well I am certainly not crazy or brave enough to get drawn into a gender debate here, however I will CAREFULLY and politically correctly opine on the subject.

Findings in recent surveys show that women are more patient than men (insert your own gender related joke here at your own risk) and they possess better long term vision. It suggests that men suffer from impatience, greed and excessive confidence (ladies it is your turn to insert a joke).

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The Real Test

In an investment banking intern trading simulation exercise the women interns lost less money than men. Side note- interns always lose money so losing less is an accomplishment I guess. The findings suggest that men and women trade differently.

It showed that women were more likely to consider the risks and avoid rash investment decisions. They managed their emotions better than their male counterparts. Men were more prone to trade with their ‘gut’ and were more likely to transgress trading limits.

Well quite frankly I find the gender debate in trading to be quite ridiculous. A female trader who is patient and risk averse may miss a large market move because of her patience and long term vision. A man who rushes into trades can be much more susceptible to paying highs and hitting lows. Conversely the same move may be caught by the man who reacts quickly without much thought.

Let me suggest an experiment here…. we insert the word ‘trader’ wherever we said male or female. Traders, male or female, trade in different styles, approaches, and risks. Over the years I’ve seen traders with small positions with consistent profits and some with consistent losses. Large risk takers show big profit and also lose big money. Styles differ but the one thing that remains constant is that traders are a special breed.

A trader who can make money and establish a successful track record remains a trader. The ones that cannot trade, do not last. It’s that simple, forget male, female, black, white, purple or two-headed aliens. No head of a trading room cares about any or that. You either add to the bottom line or you don’t. It’s really that simple.

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