Stock Market Trading Floor Hand Signals
Hand signals are first adopted by chicago mercantile exchange in the early 1970 s.
Stock market trading floor hand signals. Hand signals the sign language of futures trading represent a unique system of communication that effectively conveys the basic information needed to conduct business on the trading floor. Traders use signals to quickly negotiate buys and sells on the floor. Stock market to permit the transmission of buy and sell orders through hand signals. At one time all stock market trading took place using something called open outcry which had traders communicating their trading information by crying out or using hand signals.
Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange typically on a trading floor. Signals that occur with palms facing out and hands away from the body are an indication the gesturer wishes to sell. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders. Hand signals are better and faster than a verbal communication in a noisy trading floor environment.
Open outcry and the nyse. The signals let traders and other floor employees know how much is being bid and asked how many contracts are at stake what the expiration months. Traders usually flash the signals quickly across a room to make a sale or a purchase. The new york stock exchange does have floor traders but they don t use hand signals.
The method uses verbal and hand signal communications to convey information such as a stock s name the quantity the broker wants to trade and the price at which he or she wants to deal. The amex is the only u s. Only one commodity trades in a particular pit location so the hand signals simply indicate whether the trader is a buyer or seller how much they re looking to trade and what price they would like to trade at. The part of the trading floor where this takes place is called a pit.
It was similar to the communication you d see in an auction where traders raised a hand to raise their bid. These signals may represent different types of orders a price or the number of shares intended to be part of the trade.
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