Why use Hand Signals in the Futures Trading Pits?
The futures trading pit is a chaotic place requiring very fast decision making skills, sharp communication skills, and the ability to execute orders quickly. The chaos in the pits makes it almost impossible for the floor specialists to take orders from dozens of pit traders who are yelling at the top of their lungs; therefore, the advent of the futures hand signals came into play during the early 1970’s. These hand signals are commonly referred to as the sign language of the futures trading pit. This method of communication allows the traders to communicate quantity, price, expiration month, type of order (buy, sell, cover, short), and even the status of the order. Futures hand signals facilitate a more efficient means of communication as the trader can put an order in from a distance. Remember, the pits are full of aggressive traders who are all attempting to get color on the market place and position themselves on the floors’ prime real estate to get their order executed as fast as p
