Communication method on the trading floors of stock exchanges
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 screensOpen outcry "pit" at the Chicago Board of Trade (CBOT) in 1993CBOT "The Pit" in 1908
Open outcry is 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 among traders. This started changing in the latter half of the 20th century, first through the use of telephone trading, and then starting in the 1980s with electronic trading systems.
As of 2021[update], a few exchanges still had floor trading using open outcry. The supporters of electronic trading claim that it is faster, cheaper, more efficient for users, and less prone to manipulation by market makers and broker/dealers. However, many traders still 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. As of 2017, open outcry in the United States was very limited, such as in a much more stream-lined form at the Chicago Board of Trade owned by the CME Group.[3]
^https://www.nyse.com/pdfs/Next_Generation_Model.pdf Archived 17 October 2012 at the Wayback Machine NYSE Next Generation Model fact sheet, 2008
^"The Art of Hand Signals" (PDF). Archived from the original (PDF) on 5 February 2012. floor trading hand signals ( 455 KiB)
^""Open outcry" is in retreat but futures and options trading-volumes surge". The Economist. 5 January 2017. ISSN 0013-0613.
Openoutcry is a method of communication between professionals on a stock exchange or futures exchange, typically on a trading floor. It involves shouting...
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An English auction is an open-outcry ascending dynamic auction. It proceeds as follows. The auctioneer opens the auction by announcing a suggested opening...
are 11:40 to 17:00 GMT. The LME is the last exchange in Europe where open-outcry trading takes place. The ring was temporarily closed in March 2020 due...
auction" markets with buyers and sellers consummating transactions via openoutcry at a central location such as the floor of the exchange or by using an...
the NYMEX maintained a small venue, or "pit", that still practiced the openoutcry trading system, in which traders employed shouting and complex hand gestures...
Exchange (IPE), now ICE Futures Europe, which operated Europe's leading open-outcry energy futures exchange. Since 2003, ICE has partnered with the Chicago...
contracts was added to its products offering. Trading was conducted by openoutcry, where traders meet on the trading floor (in what is called the pit)...
commercial neighborhood. The pit is a raised octagonal structure where open-outcry trading takes place. Operating during regular trading hours (RTH), the...
trading jacket is a blazer garment worn by a broker who executes trades by openoutcry in and around the trading pits of various financial exchanges. Throughout...
Psychology of Human Misjudgment, Munger mentioned Tupperware parties and openoutcry auctions, where he explained "three, four, five of these things work...
in the Bund contract away from its chief cross-continental rival, the openoutcry operated LIFFE, it began the merger proceedings with SOFFEX (the Swiss...
or tobacco. A Dutch auction has also been called a clock auction or open-outcry descending-price auction. This type of auction shows the advantage of...
years. CGSE is amongst the few Exchange in the world that has both an openoutcry and an electronic precious metals trading platform. It is Hong Kong's...
also used, the latter being inspired from that of an openoutcry stock exchange. As openoutcry is gradually replaced by electronic trading, the trading...
transactions are carried out on a trading floor, by a method known as openoutcry. This method is used in some stock exchanges and commodities exchanges...
was acquired by the Intercontinental Exchange in 2001. The IPE was an openoutcry exchange until 7 April 2005, when its name was changed to ICE Futures...
2023-12-13. Roeder (2022-06-06). "'Openoutcry' trading cranks up the volume at Chicago's equity options market, 'openoutcry' cranks up the volume - Chicago...
any location and are in contrast to traditional floor trading using openoutcry and telephone-based trading. Sometimes the term trading platform is also...
employee of the New York Stock Exchange), acts as an auctioneer in an openoutcry auction market environment to bring buyers and sellers together and to...
Chicago Mercantile Exchange (CME). While the firm got its start in the openoutcry pits, Jump Trading does most of its trading electronically. The company...
trade on the exchange. The people who operate as floor traders are in an openoutcry system that has slowly been replaced by automated trading systems and...
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