Want to calm financial markets? Add more women and older people to the young men on trading desks. That is one recommendation resulting from research into the role of hormones in provoking risky behaviour in financial decisions. Cortisol and testosterone, more prevalent in young men, lead traders to take risks and keep taking them once they have had success, leading to winning streaks and crashes, said Ed Roberts, a researcher at Imperial College London.Roberts and his colleagues gave the hormones or placebos to test subjects and had them make simulated investment decisions. Those dosed with hormones made riskier bets, according to a paper published in the journal Scientific Reports.Trading "is very dominated by young men, which is an unusual subset of people," Roberts said. "It's a higher testosterone group, a very competitive group. Do they perform as rationally as they would if they were in a group that's mixed? The social environment has such a big role in people's behaviour."Other ways to reduce risky bets might be to limit personal incentives for traders, and ensure that financial data is released more frequently, which would reduce the uncertainty that stimulates the stress hormone cortisol, Roberts said.By giving participants cortisol and testosterone, the researchers established a direct connection with taking chances in finance, said Roberts, who studies brain function and the endocrine system, the web of glands and hormones thatinfluence decision-making.The new study had two parts. In the first, 142 men and women played a fast-paced trading game without being given additional hormones, and their saliva was tested three times over two hours. High levels of cortisol in men were connected with trading frequency, mispricing and overall price instability. Women, who have other hormones, such as estrogen, that modulate the role of cortisol and testosterone, didn't show the same effect.In the second part, men were administered the hormones and asked to participate in mock trading sessions. Compared to men given a placebo, they favoured riskier stocks.The study also examined the different roles played by cortisol and testosterone. Cortisol is produced at times of uncertainty and stress, triggering a "fight or flight" response that can promote risky or aggressive behaviour. The effects often fade quickly.Testosterone, by contrast, is related to optimism and self-confidence, and can build over days.Profiting from a trade can generate the hormone, resulting in self-confidence that can produce more success and more testosterone, Roberts said. The effect creates "irrational exuberance" that ends in a crash, he said.By reducing the effects of hormones on trading, "you should get better returns and longer period of stability where people make money," Roberts said. "That's beneficial to everyone."The study was co-authored with Carlos Cueva, an economics professor at the University of Alicante in Spain. Other involvement in the research came from institutions including the University of Cambridge, the UK's Royal College of Psychiatrists, the University of Zurich and the University of Minnesota. ..