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Open Outcry
Open Outcry
Published: 2012/01/17
Channel: directcinemalimited
Open Outcty (PBS) - Part 2
Open Outcty (PBS) - Part 2
Published: 2013/04/20
Channel: taub ..
A guide to open outcry arbitrage hand signals
A guide to open outcry arbitrage hand signals
Published: 2015/07/02
Channel: WBEZ
Wall Street Warriors - Season 2 Episode 5 - The Open Outcry
Wall Street Warriors - Season 2 Episode 5 - The Open Outcry
Published: 2013/12/14
Channel: TradingCoachUK
Open Outcty (PBS) - Part 4
Open Outcty (PBS) - Part 4
Published: 2013/04/20
Channel: taub ..
LIFFE Open Outcry Trading in
LIFFE Open Outcry Trading in '80s in The Royal Exchange, Ruti Ahronee
Published: 2012/05/10
Channel: Ruti Ahronee
Last day of open outcry in Coffee pit
Last day of open outcry in Coffee pit
Published: 2012/10/26
Channel: Matthew Denberg
Floored: Standing in the Twilight of Open Outcry.
Floored: Standing in the Twilight of Open Outcry.
Published: 2008/03/11
Channel: flooredmovie
INSIDE LOOK at the LONDON METAL EXCHANGE - See How The Big Trades Happen
INSIDE LOOK at the LONDON METAL EXCHANGE - See How The Big Trades Happen
Published: 2016/02/25
Channel: Elite NWO Agenda
PBS Open Outcry 2000 Funding Credits
PBS Open Outcry 2000 Funding Credits
Published: 2016/11/24
Channel: วิจิตร อรทัย
Pit Trading clips
Pit Trading clips
Published: 2013/06/14
Channel: Larsenfam
Chicago Merc hand signals: Dying art
Chicago Merc hand signals: Dying art
Published: 2010/07/21
Channel: CNNMoney
Final open outcry cash cheese auction at CME / Chicago
Final open outcry cash cheese auction at CME / Chicago
Published: 2017/06/23
Channel: Michael Sklut
Inside LME - Open outcry ring trading inside London Metal Exchange
Inside LME - Open outcry ring trading inside London Metal Exchange
Published: 2013/10/20
Channel: Travel with Louie
CBOT Trading Soybean market pit trading.
CBOT Trading Soybean market pit trading.
Published: 2006/12/29
Channel: Bryan Shaughnessy
Reactions to the End of Open Outcry
Reactions to the End of Open Outcry
Published: 2015/02/05
Channel: Alexandra Lively
Angry broker at the CME
Angry broker at the CME
Published: 2009/09/19
Channel: taub ..
Open Outcry - Full length video
Open Outcry - Full length video
Published: 2012/11/29
Channel: mybarclayswealth
Open Outcry 2013: Shouting Their Way to the Top
Open Outcry 2013: Shouting Their Way to the Top
Published: 2013/06/10
Channel: C. T. Bauer College of Business
Radiolab - Open Outcry [Ben Rubin]
Radiolab - Open Outcry [Ben Rubin]
Published: 2017/07/22
Channel: Radiolab Podcast
Open Outcry Trading - IPE/ LIFFE
Open Outcry Trading - IPE/ LIFFE
Published: 2015/03/02
Channel: Blayne Jackson
MGEX - The final minute of trading in the pits, forever.
MGEX - The final minute of trading in the pits, forever.
Published: 2009/03/06
Channel: dpats5904
Open Outcry Broker
Open Outcry Broker
Published: 2010/11/22
Channel: heelsfan081
Open Outcry Brewing Co.
Open Outcry Brewing Co.
Published: 2017/10/24
Channel: DNAinfo Chicago
FLOORED The Complete Documentary Film
FLOORED The Complete Documentary Film
Published: 2013/07/31
Channel: flooredmovie
What is OPEN OUTCRY? What does OPEN OUTCRY mean? OPEN OUTCRY meaning, definition & explanation
What is OPEN OUTCRY? What does OPEN OUTCRY mean? OPEN OUTCRY meaning, definition & explanation
Published: 2017/04/25
Channel: The Audiopedia
Video Series - Intro to Open Outcry Brewing Co
Video Series - Intro to Open Outcry Brewing Co
Published: 2017/08/10
Channel: Open Outcry Brewing Company
Open Outcry Brewing Co.
Open Outcry Brewing Co.
Published: 2017/05/12
Channel: DNAinfo Chicago
JP Morgan quits
JP Morgan quits 'open outcry' at London Metal Exchange
Published: 2015/09/08
Channel: euronews Business
Open outcry Meaning
Open outcry Meaning
Published: 2015/04/23
Channel: SDictionary
The last Open Outcry Trading Session on Helsinki Stock Exchange March 30,  1990.
The last Open Outcry Trading Session on Helsinki Stock Exchange March 30, 1990.
Published: 2017/04/26
Channel: Nasdaq
Electronic versus Open Outcry Markets
Electronic versus Open Outcry Markets
Published: 2013/09/27
Channel: UKspreadbetting
NYMEX Open Outcry Trading Challenge
NYMEX Open Outcry Trading Challenge
Published: 2008/04/08
Channel: ThatBauerGirl
CME/CBOT Reunion Party and Open Outcry Tournament
CME/CBOT Reunion Party and Open Outcry Tournament
Published: 2015/07/07
Channel: Collin Palmer
Entrima - Concepts explained - Exchange trading floor - Open outcry
Entrima - Concepts explained - Exchange trading floor - Open outcry
Published: 2015/05/26
Channel: Entrima
Price Discovery: Open Outcry Markets
Price Discovery: Open Outcry Markets
Published: 2015/11/02
Channel: CarnegieMellonQatar
Open Outcry
Open Outcry'13 Final Teaser!
Published: 2013/08/01
Channel: Neha Mishra
Open Outcry - Highlight video
Open Outcry - Highlight video
Published: 2012/12/24
Channel: mybarclayswealth
Open Outcry 4.0
Open Outcry 4.0
Published: 2016/03/20
Channel: Finomina
2008 NYMEX Open Outcry - Final Round
2008 NYMEX Open Outcry - Final Round
Published: 2008/04/20
Channel: Matt
Open outcry commodity trading to end, Farmweek, April 10, 2015
Open outcry commodity trading to end, Farmweek, April 10, 2015
Published: 2015/04/09
Channel: MissStateExtension
The last Open Outcry trading session ceremony at Helsinki Stock Exchange 30 March 1990
The last Open Outcry trading session ceremony at Helsinki Stock Exchange 30 March 1990
Published: 2017/04/26
Channel: Nasdaq
Laatste dag open outcry -CNBC 2002
Laatste dag open outcry -CNBC 2002
Published: 2013/09/25
Channel: AEX NL
Estudiantes de la EIAM en el Open Outcry Trading Challenge
Estudiantes de la EIAM en el Open Outcry Trading Challenge
Published: 2013/04/03
Channel: Nicolas Rivera
Estudiantes EIAM en Open Outcry Trading Challenge
Estudiantes EIAM en Open Outcry Trading Challenge
Published: 2013/04/03
Channel: Nicolas Rivera
Bauer Students in Winning Circle at CME Financial Open Outcry Competition
Bauer Students in Winning Circle at CME Financial Open Outcry Competition
Published: 2012/04/13
Channel: C. T. Bauer College of Business
Singapore Buttonwood- Singapore
Singapore Buttonwood- Singapore's First Open Outcry Bitcoin Sale
Published: 2013/08/02
Channel: Coin Republic
That Bauer Girl Episode 4 -- NYMEX Open Outcry
That Bauer Girl Episode 4 -- NYMEX Open Outcry
Published: 2008/06/26
Channel: ThatBauerGirl
Open Outcry v2
Open Outcry v2
Published: 2013/08/15
Channel: Anusha Ganne
Harlem Shake Open Outcry Trading at CBoT CME
Harlem Shake Open Outcry Trading at CBoT CME
Published: 2013/06/23
Channel: RythmStreet
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WIKIPEDIA ARTICLE

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Until 2009,[1] trades on the floor of the New York Stock Exchange always involved a face-to-face interaction. There is one podium/desk on the trading floor for each of the exchange's three thousand or so stocks.
The New York stock exchange trading floor in September 1963, before the introduction of electronic readouts and computer screens.

Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange typically on a trading floor. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders.[2] The part of the trading floor where this takes place is called a pit.

In an open outcry auction, bids and offers must be made out in the open market giving all participants a chance to compete for the order with the best price. New bids or offers would be made if better than previous pricing for efficient price discovery. Exchanges also value positions marked to these public market prices on a daily basis. In contrast, over-the-counter markets are where bids and offers are negotiated privately between principals.

Since the development of the stock exchange in the 17th century in Amsterdam, open outcry was the main method used to communicate between traders. However, this started changing in the later half of the 20th century, first through the use of telephone trading and then starting in the 1980s with electronic trading systems.

As of 2007 few exchanges still had floor trading using open outcry. The supporters of electronic trading claim that they are faster, cheaper, more efficient for users, and less prone to manipulation by market makers and broker/dealers. However, many traders advocate for the open outcry system on the basis that the physical contact allows traders to speculate as to a buyer/seller's motives or intentions and adjust their positions accordingly. As of 2010 most stocks and futures contracts were no longer traded using open outcry due to the lower cost of the aforementioned technological advances.

History[edit]

Since the 1980s the open outcry systems have been being replaced by electronic trading systems (such as CATS and Globex).

Floor trading is the meeting of traders or stockbrokers at a specific venue referred to as a trading floor or pit to buy and sell financial instruments using open outcry method to communicate with each other. These venues are typically stock exchanges or futures exchanges and transactions are executed by members of such an exchange using specific language or hand signals. During the 1980s and 1990s phone and electronic trading replaced physical floor trading in most exchanges around the world.

As of 2007 few exchanges still have floor trading. One example is the New York Stock Exchange (NYSE) which still executes a small percentage of its trades on the floor. That means that the traders actually form a group around the post on the floor of the market for the specialist, someone that works for one of the NYSE member firms and handles the stock. As in an auction, there are shouts from those that want to sell and those that want to buy. The specialist facilitates in the match and centralizing the trades.

On 24 January 2007, the NYSE went from being strictly an auction market to a hybrid market that encompassed both the auction method and an electronic trading method that immediately makes the trade electronically. A small group of extremely high-priced stocks isn't on this trading system and is still auctioned on the trading floor.

Even though over 82 percent of the trades take place electronically, the action on the floor of the stock exchange still has its place. While electronic trading is faster and provides for anonymity, there is more opportunity to improve the price of a share if it goes to the floor. Investors maintain the right to select the method they want to use.[when?]

Conversion to electronic trading[edit]

Since the 1980s, Nymex had a virtual monopoly on 'open market' oil futures trading, but the electronically based IntercontinentalExchange (ICE) began trading oil contracts that were extremely similar to Nymex's in the early 2000s and Nymex began to lose market share almost immediately. The pit-traders at Nymex had been resisting the electronic move for decades, but the executives believed the exchange had to move to the electronic format, or it would cease to exist as a viable business. The executives introduced CME's Globex system into Nymex in 2006.[7]

Hand signals[edit]

Floor hand signals are used to communicate buy and sell information in an open outcry trading environment. The system is used at futures exchanges such as the Chicago Mercantile Exchange.

Traders usually flash the signals quickly across a room to make a sale or a purchase. Signals that occur with palms facing out and hands away from the body are an indication the gesturer wishes to sell. When traders face their palms in and hold their hands up, they are gesturing to buy.

Numbers one through five are gestured on one hand, and six through ten are gestured in the same way only held sideways at a 90 degree angle (index finger out sideways is six, two fingers is seven, and so on). Numbers gestured from the forehead are blocks of ten, and blocks of hundreds and thousands can also be displayed. The signals can otherwise be used to indicate months, specific trade or option combinations, or additional market information.

These rules may vary among exchanges or even among floors within the same exchange; however, the purpose of the gestures remains the same.

References[edit]

  1. ^ NYSE Next Generation Model fact sheet, 2008(PDF)
  2. ^ "The Art of Hand Signals" (PDF).  floor trading hand signals ( 455 KiB)
  3. ^ Stevenson, Rachel (8 March 2005). "Petroleum exchange silences open outcry". Independent, The (London),. Retrieved 2008-12-13. 
  4. ^ Kelsey, Eric (October 2008). "Grain Exchange to Stop Open Outcry". Retrieved 2008-12-17. 
  5. ^ Technology squeezes out real, live traders, Adam Shell, USA Today, 2007 7 11
  6. ^ He Fixed the NYSE. Can He Fix Merrill?, Bloomberg Businessweek (author not listed on website) NOVEMBER 26, 2007
  7. ^ The Asylum, Leah McGrath Goodman, 2011, Harper Collins

External links[edit]

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