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This is your brain on Robinhood

Visitors enjoy a rollercoaster ride in Munich.
Reuters/ Lukas Barth
Hormone-fueled ups and downs.
  • John Detrixhe
By John Detrixhe

Future of finance reporter


John Coates probably knows more than anyone else about the interplay between hormones and financial markets.

The former derivatives trader is the author of The Hour Between Dog and Wolf: Risk Taking, Gut Feelings, and the Biology of Boom and Bust. Before he trained in neuroscience and endocrinology at the University of Cambridge, Coates got a PhD in economics there and then worked on trading desks at Goldman Sachs and Deutsche Bank. He says he switched from Wall Street to science because the biology of financial risk-taking was fundamentally misunderstood.

The idea that trading is purely intellectual is wrong, Coates writes, because it leaves out the connection between our bodies, the “emergency network of physiological circuitry,” and the brain. Steroid hormones like testosterone can boost confidence during times of stress, and they’re part of a system of “gut feelings” needed for speedy decisions. But the chemicals can also overwhelm us, inspiring the strutting, irrational invincibility of a trader during a bubble, as well as a prolonged, unreasonable fear of risk in the aftermath of a crash. Hormones could very well be making booms and busts worse than they need be.

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