A Chicago-based hedge-fund performance coach is recommending a brain-zapping device to calm nerves during market stress. We spoke to one manager who called the gadget 'a huge part of what I do.'

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A computer-created model uses the device

• Alpha Stim is a device that sends electricity through the brain with the aim of helping people with depression, anxiety, and insomnia. Chicago-based hedge-fund performance coach Dr. Ken Celiano is also recommending it for traders who want to keep an even keel.
• Performance coaches are common in the hedge fund industry, with managers like Point72 founder Steve Cohen employing people like Tiger Woods' former performance coach Dr. Gio Valenti as well as Denise Shull.
• Business Insider first spotted the device at Essentia Analytics' Behavioral Alpha conference in New York, where Celiano was wearing one while speaking on stage with Shull and other panelists. We wanted to learn more about the lengths traders are willing to go to in order to gain an edge.
• "It's a huge part of what I do as a human discretionary money manager. I call it the 'game within the game,'" said hedge fund manager Zach Abraham, who told us he uses the device on the recommendation of Celiano.
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One hedge-fund performance coach believes he's found something that's about to take off with hedge fund managers: A Walkman-looking device that attaches to your earlobes and sends a mild electrical shock through your brain.

Performance coaches are common in the hedge fund industry, with managers like Point72 founder Steve Cohen employing people like Tiger Woods' former performance coach Dr. Gio Valenti as well as Denise Shull, who had claimed in a lawsuit that the psychologist Wendy Rhoades in the Showtime series "Billions" is based off of her.

Business Insider first spotted the device at Essentia Analytics' Behavioral Alpha conference in New York, where Dr. Ken Celiano was speaking on stage with Shull and other panelists. Celiano was wearing the Alpha Stim device during the panel.

While we did not try the device ourselves, and cannot attest to how it may impact performance, we wanted to learn more about the lengths traders are willing to go in order to gain an edge. The veteran Chicago-based performance coach says he has recommended the device to 20 traders.

According to the device-maker's website and YouTube channel, Alpha Stim is an FDA-cleared treatment option for people suffering from insomnia, depression, pain, and anxiety.The technology has also been recommended to people with post-traumatic stress disorder, Celiano said.

"It creates that feeling of being even-keel," said Celiano of the device, which he was first introduced to when he was looking for a solution to his symptoms from restless leg syndrome.

"It gets a person out of fight-or-flight - being able to hold yourself in that state of uncertainty, but stick to a plan or strategy or idea, that's even-keeled."

Cranial electrotherapy stimulation is an FDA-approved method of treating anxiety and other mental illnesses that has grown increasingly popular as people search for ways beyond pharmaceuticals to treat diseases and disorders.

But the idea of this technology being put to use by traders in a high-stress environment is still relatively novel, according to Celiano. He said he reached out to the device-maker to see if there had been an influx of orders for finance purposes, and was told no.

Still, he thinks the technology could find fans in an industry obsessed with performance.

"It's a very interesting space to be in, because any way to influence alpha is going to get a tremendous amount of people interested," he said.

Hedge fund managers have been known to spare no expense to boost returns, with billions being thrown at alternative data and quants with doctorate degrees. Even though 2019 has been relatively kind to the industry - hedge funds have returned a little more than 7% on average - performance has still trailed the overall market, and investors have been leaving in droves.

Private equity, one industry data-tracker found, is going to pick up a large share of the assets leaving the hedge fund space.

One hedge fund manager that swears by the device is Praxis Capital founder Zach Abraham, who brought on Celiano as his performance psychologist.

Abraham said he first tried the tool because he needs to keep his stress levels low, because he has Lyme disease, and has had flare-ups caused by high-pressure situations. A founder of high-frequency trading shop Vine Street Trading who plays in the derivatives market, Abraham said he is constantly getting in and out of positions.

"This requires around-the-clock attention to markets and unfortunately you find yourself in a constant state of fight-or-flight. Your nervous system gets overstimulated and it can affect stress, sleep quality, the ability to stay present in other areas of your life," Abraham said in an email to Business Insider.

The device helps him "stay in the eye of the storm."

His use of the device is varied, he said, and on heavy trading days, "I'm typically using it regularly - both in the office during the trading day and in the evening when I'm wanting to relax."

On his six-person team, both his risk manager and his execution trader "aren't afraid to use the Alpha Stim when needed," he said.

Abraham said he has yet to experience any side effects. The website for the device states that mild skin irritation and electrode burns on the earlobes as well as headaches have occurred. (The website, selling its own product, compares the side effects to those of prescription drugs that are meant to treat different mental illnesses).

When asked if he would recommend it to competing hedge fund managers, Abraham said no, tongue-in-cheek, because he doesn't want help any rivals, before saying "of course I would."

"It's a high-pressure business - performers in all walks of life need to understand that living in a constant state of fight-or-flight is not good for their health or their life outside of competition," he said.

"It's a huge part of what I do as a human discretionary money manager. I call it the 'game within the game.'"

The devices aren't cheap - ones that are send shocks through just the brain go for hundreds of dollars, while more extensive devices that treat pain in other areas of the body are more expensive.

To Celiano though, the device is just one part that helps investors find their "inner market" - what he considers to comprise "their feelings, their story, their perceptions, how they view the world through their own biases." Regulating emotions can be a big boost to the bottom line, he said.

"We're still dealing with the human data, which is the stories we tell ourselves," he said. "My mission is to help them know themselves."