Business World

Thursday 26 April 2018

Women make better traders than men - survey

Canary Wharf
Canary Wharf

Ruth Nolan

Women traders are still few and far between as only 15pc of them in investment banks are female.

However, this may all be about to change as new research shows that women could actually make better traders than men.

Research from Financial Skills, a trading profiling company that was founded by a group of ex-traders from Merrill Lynch, involving 326 junior traders, showed that women stuck to the rules, took fewer risks and were better short-sellers.

“We found that men take more risk than women,” says Financial Skills chief operations officers David Hesketh. “That would be fine if they also made more money – but they don’t.”

The rules involved included restricted trading times, for example, and although all participants were expected to break these rules, the male traders broke these rules 2.5 times more than their female counterparts.

The women were also better at short selling, something that would be a major asset to hedge funds with equity/long short strategies.

Overall the women took fewer risks and traded less, resulting in lower brokerage costs and higher transaction costs.

Hesketh’s findings are now being passed on to major recruitment firms, changing the way investment banks think of workforce diversity.

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