Women may be better predisposed than men for the role of a trader, according to a white paper by Alexander Mann Solutions.
The white paper, Are Women Better Traders Than Men?, is based on a review of a study designed to test the respective trading behaviours of men and women undertaken in partnership with Trading Hub. Working with banks, hedge funds and brokerages, Trading Hub put around 350 entry-level graduates [a third female and two thirds male] through a four-week simlulated trading exercise. The participants were asked to make as much virtual money as possible.
In terms of total profit and loss, the gender groups’ results were fairly similar. Both lost money, with the men averaging total losses of £67,000 while the women incurred losses on average of £50,000, a 34% difference. However, the genders scored very differently on three other key measures:
Male traders took on average 30% more risk than females. Alexander Mann Solutions says that over time this means men will end up losing even more money.
Men were also two and a half times more likely to break the rules on things like booking late trades or exceeding risk limits. Alexander Mann Solutions says this shows “a tendency towards reckless trading behaviour”.
Moreover, female interns placed fewer traders. In terms of average trades, the men outscored the women by 94 to 69. AMS says this means that any financial institution employing large numbers of female traders will likely incur lower brokerage costs and suggests female traders are more efficient, making more money and using less capital and trading time in the process.
It says the evidence suggests “women are at a minimum as adept at trading as men”.