Hand signaling, also known as arb or arbing (short for
arbitrage
In economics and finance, arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalise on the difference, the profit being the difference between the ...
), is a system of hand signals used on financial trading floors to communicate buy and sell information in an
open outcry
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 order ...
trading environment. The system is used at financial exchanges such as the
Chicago Mercantile Exchange
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an a ...
(CME) and the
American Stock Exchange (AMEX). The AMEX is the only U.S. stock market to permit the transmission of buy and sell orders through hand signals.
[Larry Harris, ''Trading and Exchanges'', Oxford University Press US: 2003, page 104, , ]
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 with the fingers pointing directly upwards. To indicate six through ten, the hand is held sideways, parallel to the ground. Counting starts from six when the hand is held in this way. Numbers gestured from the forehead are blocks of ten, blocks of hundreds and thousands can be indicated by repeatedly touching the forehead with a closed fist. The signals can otherwise be used to indicate months, specific trade option combinations or additional market information.
[ trading floor hand signals ]
Rules vary significantly among exchanges; however, the purpose of the gestures remains the same.
See also
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Chinese number gestures
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Finger binary
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Nonverbal communication
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Sign language
References
External links
Trading Pit History
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Sign systems