AI
Thursday, September 23, 2004 11:37:16 PM
Plaid?? Hm, going to have to look this one up. Ok, speculators can wear red, but really can wear whatever that want to. It's all the rest of the 'flunkies" that get to wear the colored jackets. And how can we forget the "secret" hand signals and the shouting.
All traders in the pits are members of CME®. They may be private speculators who trade for their own profit, or floor brokers who act as agents for customers of brokerage firms. Dividing the trading floors (one downstairs and one upstairs) into sections are rows of workstations or desks. This is where orders are called or sent electronically into the brokerage firms from customers. Different colored jackets help to identify everyone on the CME trading floor. Here’s how you identify who’s who:
Red jackets are worn by members or brokers of CME who trade in the pits, although many choose to wear different colors or patterns to make it easy to distinguish them on the floor. A floor broker refers to an Exchange member who executes orders for the accounts of one or more clearing members and their customers. A local or floor trader is a member who executes trades for his own account. Please note that members have either purchased their trading rights, or they are leasing the trading rights.
Runners and phone clerks wear gold jackets. They are employees of brokerage firm members or individual members. A runner’s responsibility is to get the customer’s order to the appropriate broker in the correct pit as soon as possible. Filled orders then need to be returned to the firm’s desk for confirmation to the customer. The runner’s job is an important one because it provides the vital link between the customer and the execution of his order by the broker in the trading pit.
Out-trade clerks wear pale green jackets. They are employees of brokerage firms and CME members. They're responsible for helping resolve the previous day’s trade discrepancies each morning before the start of regular trading hours.
Market reporters wear light blue jackets. A market reporter is a trained pit observer employed by CME. They are responsible for reporting the prices of pit transactions and entering the information into CME’s computerized price reporting system. This price information is then displayed on the price quotation boards on the trading floor and transmitted to investors and brokers around the world via wire services and quotation vendors.
Orange jackets are worn by members of CME who may only trade emerging market futures and options on futures such as the Mexican peso or Brazilian real.
Dark blue jackets are worn by CME employees, while CME Information Technology employees wear black jackets.
One more thing – CME has different types of exchange memberships that determine which futures and options on futures contracts can be traded in the pit by that member. A CME membership entitles its owner to trade every contract CME offers. An IMM® (International Monetary Market) membership allows its owner to trade everything but agricultural commodities.
An IOM® (Index and Options Market) permits its owner to trade lumber as well as all equity index futures and all options on futures contracts traded. A GEM® (Growth and Emerging Markets) membership entitles its owner to trade emerging market products.
How many people does that make?
Quite a few. On any given day, about 6,000 people are on CME's two trading floors including, traders, firm employees and CME employees.
http://www.cme.com/edu/getstr/webless/whowho881.html
Hand Signals (anybody wanting to see the hand signals will have to check the link, http://www.cme.com/edu/getstr/handsgnl648.html for the graphics, I put a few but there are too many)
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. 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 are, the types of orders and the status of the orders. The signals are the favored form of floor communication, especially in the financial futures pits, for three main reasons:
1.) Speed and efficiency
Hand signals enable fast communication over what can be long distances (as much as 30 or 40 yards) between the pits and order desks and within the pits themselves.
2.) Practicality
Hand signals are more practical than voice communication because of the number of persons on the floor and the general noise level.
3.) Confidentiality
Hand signals make it easier for customers to remain anonymous, because large orders do not sit on a desk, subject to accidental disclosure.
Hand Signal Development
Hand signals began being used extensively at CME® in the early 1970s, after the Exchange created the International Monetary Market (IMM) and became the first U.S. futures exchange to offer financial (rather than commodity-based) futures. Although speed had long been a key element in futures trading, it became even more important when financial futures entered the trading scene. Why? Because traders discovered they could take advantage of arbitrage opportunities between CME and other markets if they could trade quickly enough. (Arbitrage refers to the simultaneous purchase and sale of the same or an equivalent commodity or security to profit from price discrepancies. When price discrepancies emerge in the marketplace, the arbitrageur buys/sells until it is no longer profitable, or until prices are back in equilibrium.) Hand signals met the need to speed up communication in the fast-moving financial futures pits.
Following are the signals most commonly used at CME. Some are unique to particular pits on the CME floors. But take note, some signals may mean one thing in a certain pit, while a similar signal may mean something entirely different in another pit.
Buy/Sell
When indicating you want to buy (signaling a bid), the palm of the hand always faces toward you. You can remember this by thinking that when you’re buying, you’re bringing something in toward you. When making an offer to sell (offering), the palm always faces away from you. Think of selling as pushing something away from you.
Buy
Sell
Your palms face you when you are signaling a "buy," and face away from you when you are signaling a "sell."
Price
To signal price, extend the hand in front of and away from the body. For the numbers one to five, hold your fingers straight up. For six through nine, hold them sideways. A clenched fist indicates a zero or "even."
Note: Price signals indicate only the last digit of a bid or offer. For example, a "0" signal may refer to a "40" bid.
one
two
three
four
five
six
seven
eight
nine
even
Quantity
To indicate quantity – the number of contracts being bid or offered – touch your face.
To signal quantities one through nine, touch your chin.
To show quantities in multiples of 10, touch your forehead.
To show quantities in multiples of 100, make a fist and touch your forehead.
one
ten
seven
ninety
one hundred
five hundred
seven hundred
Expiration Months
All futures contracts have an expiration month; thus, there are standard hand signals that indicate each month.
january
put hand in front of throat
february
thumb down, index and middle finger out
march
wiggle fingers, thumb tucked in
april
wiggle fingers while lowering hand and arm
may
hold jacket flap
june
make bunny ears pointed downward
july
point to eye
august
rub forehead with four fingers, circular motion
september
hold palm open, pointing up
october
victory sign
november
make an X in front of face
december
cross index and middle finger, as in good luck sign
Expiration Cycles
Trading Eurodollars involves a set of hand signals that convey expiration cycles. Eurodollars are listed in quarterly cycles, extending out 10 years. They are traded in 12-month "packs," consisting of four 3-month quarters, with expiration months of March, June, September and December. Each 12-month pack is assigned a certain color. For example, the first series of contracts – those that are up to one year out – are called the "whites," although they’re usually just referred to as the "front months." After "the whites" come the "reds," (the series of contracts one to two years out), followed by the "greens" (which are two to three years out), and so on. (The colors for the years four through 10 are, respectively, blue, gold, purple, orange, pink, silver and copper.) There is a hand signal that indicates each of these packs, except for the whites or front months. Below are some packs signals.
reds
one motion; hand moves down from vertical to touch shoulder
greens
index finger and thumb joined as in "ok"
blues
fingers wiggle back and forth
golds
thumb on ring finger
Market Signals
Other hand signals convey the following:
filled
thumb up; indicates that an order is completely filled
working
index finger rotates forward; means that the broker has not filled the order but is still attempting to do so; also used for partially filled orders on which the broker is still working to fill completely.
stop
fist into palm; means that the order is a stop order (activated when the price reaches a certain level).
At that point, a stop order becomes a market order and the broker must attempt to get the best price when filling it. Can be used to enter or exit both long and short positions. For example, if you are long and fear a drastic price drop, you can issue a stop order to be activated when the contract drops to a given price. Your stop then becomes a market order that the broker will attempt to fill before the price drops even more — even if it requires selling at or below the stop price. Likewise, a short can issue a "buy" stop order if he fears the price will rise.
out/cancel
hand moves across throat; shows that the order has been canceled.
options
In options trading on the CME floor, traders need to indicate whether an order is a put or a call, in addition to using the standard signals to convey other information about the order.
put
call
Summary
This has been a brief introduction to CME’s hand signals. Anyone who works on the Exchange floors needs to know and use these signals perfectly. Hand signals are essential for successful pit trading at CME, and using the wrong signal could result in a substantial loss.
http://www.cme.com/edu/getstr/handsgnl648.html
All traders in the pits are members of CME®. They may be private speculators who trade for their own profit, or floor brokers who act as agents for customers of brokerage firms. Dividing the trading floors (one downstairs and one upstairs) into sections are rows of workstations or desks. This is where orders are called or sent electronically into the brokerage firms from customers. Different colored jackets help to identify everyone on the CME trading floor. Here’s how you identify who’s who:
Red jackets are worn by members or brokers of CME who trade in the pits, although many choose to wear different colors or patterns to make it easy to distinguish them on the floor. A floor broker refers to an Exchange member who executes orders for the accounts of one or more clearing members and their customers. A local or floor trader is a member who executes trades for his own account. Please note that members have either purchased their trading rights, or they are leasing the trading rights.
Runners and phone clerks wear gold jackets. They are employees of brokerage firm members or individual members. A runner’s responsibility is to get the customer’s order to the appropriate broker in the correct pit as soon as possible. Filled orders then need to be returned to the firm’s desk for confirmation to the customer. The runner’s job is an important one because it provides the vital link between the customer and the execution of his order by the broker in the trading pit.
Out-trade clerks wear pale green jackets. They are employees of brokerage firms and CME members. They're responsible for helping resolve the previous day’s trade discrepancies each morning before the start of regular trading hours.
Market reporters wear light blue jackets. A market reporter is a trained pit observer employed by CME. They are responsible for reporting the prices of pit transactions and entering the information into CME’s computerized price reporting system. This price information is then displayed on the price quotation boards on the trading floor and transmitted to investors and brokers around the world via wire services and quotation vendors.
Orange jackets are worn by members of CME who may only trade emerging market futures and options on futures such as the Mexican peso or Brazilian real.
Dark blue jackets are worn by CME employees, while CME Information Technology employees wear black jackets.
One more thing – CME has different types of exchange memberships that determine which futures and options on futures contracts can be traded in the pit by that member. A CME membership entitles its owner to trade every contract CME offers. An IMM® (International Monetary Market) membership allows its owner to trade everything but agricultural commodities.
An IOM® (Index and Options Market) permits its owner to trade lumber as well as all equity index futures and all options on futures contracts traded. A GEM® (Growth and Emerging Markets) membership entitles its owner to trade emerging market products.
How many people does that make?
Quite a few. On any given day, about 6,000 people are on CME's two trading floors including, traders, firm employees and CME employees.
http://www.cme.com/edu/getstr/webless/whowho881.html
Hand Signals (anybody wanting to see the hand signals will have to check the link, http://www.cme.com/edu/getstr/handsgnl648.html for the graphics, I put a few but there are too many)
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. 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 are, the types of orders and the status of the orders. The signals are the favored form of floor communication, especially in the financial futures pits, for three main reasons:
1.) Speed and efficiency
Hand signals enable fast communication over what can be long distances (as much as 30 or 40 yards) between the pits and order desks and within the pits themselves.
2.) Practicality
Hand signals are more practical than voice communication because of the number of persons on the floor and the general noise level.
3.) Confidentiality
Hand signals make it easier for customers to remain anonymous, because large orders do not sit on a desk, subject to accidental disclosure.
Hand Signal Development
Hand signals began being used extensively at CME® in the early 1970s, after the Exchange created the International Monetary Market (IMM) and became the first U.S. futures exchange to offer financial (rather than commodity-based) futures. Although speed had long been a key element in futures trading, it became even more important when financial futures entered the trading scene. Why? Because traders discovered they could take advantage of arbitrage opportunities between CME and other markets if they could trade quickly enough. (Arbitrage refers to the simultaneous purchase and sale of the same or an equivalent commodity or security to profit from price discrepancies. When price discrepancies emerge in the marketplace, the arbitrageur buys/sells until it is no longer profitable, or until prices are back in equilibrium.) Hand signals met the need to speed up communication in the fast-moving financial futures pits.
Following are the signals most commonly used at CME. Some are unique to particular pits on the CME floors. But take note, some signals may mean one thing in a certain pit, while a similar signal may mean something entirely different in another pit.
Buy/Sell
When indicating you want to buy (signaling a bid), the palm of the hand always faces toward you. You can remember this by thinking that when you’re buying, you’re bringing something in toward you. When making an offer to sell (offering), the palm always faces away from you. Think of selling as pushing something away from you.
Buy
Sell
Your palms face you when you are signaling a "buy," and face away from you when you are signaling a "sell."
Price
To signal price, extend the hand in front of and away from the body. For the numbers one to five, hold your fingers straight up. For six through nine, hold them sideways. A clenched fist indicates a zero or "even."
Note: Price signals indicate only the last digit of a bid or offer. For example, a "0" signal may refer to a "40" bid.
one
two
three
four
five
six
seven
eight
nine
even
Quantity
To indicate quantity – the number of contracts being bid or offered – touch your face.
To signal quantities one through nine, touch your chin.
To show quantities in multiples of 10, touch your forehead.
To show quantities in multiples of 100, make a fist and touch your forehead.
one
ten
seven
ninety
one hundred
five hundred
seven hundred
Expiration Months
All futures contracts have an expiration month; thus, there are standard hand signals that indicate each month.
january
put hand in front of throat
february
thumb down, index and middle finger out
march
wiggle fingers, thumb tucked in
april
wiggle fingers while lowering hand and arm
may
hold jacket flap
june
make bunny ears pointed downward
july
point to eye
august
rub forehead with four fingers, circular motion
september
hold palm open, pointing up
october
victory sign
november
make an X in front of face
december
cross index and middle finger, as in good luck sign
Expiration Cycles
Trading Eurodollars involves a set of hand signals that convey expiration cycles. Eurodollars are listed in quarterly cycles, extending out 10 years. They are traded in 12-month "packs," consisting of four 3-month quarters, with expiration months of March, June, September and December. Each 12-month pack is assigned a certain color. For example, the first series of contracts – those that are up to one year out – are called the "whites," although they’re usually just referred to as the "front months." After "the whites" come the "reds," (the series of contracts one to two years out), followed by the "greens" (which are two to three years out), and so on. (The colors for the years four through 10 are, respectively, blue, gold, purple, orange, pink, silver and copper.) There is a hand signal that indicates each of these packs, except for the whites or front months. Below are some packs signals.
reds
one motion; hand moves down from vertical to touch shoulder
greens
index finger and thumb joined as in "ok"
blues
fingers wiggle back and forth
golds
thumb on ring finger
Market Signals
Other hand signals convey the following:
filled
thumb up; indicates that an order is completely filled
working
index finger rotates forward; means that the broker has not filled the order but is still attempting to do so; also used for partially filled orders on which the broker is still working to fill completely.
stop
fist into palm; means that the order is a stop order (activated when the price reaches a certain level).
At that point, a stop order becomes a market order and the broker must attempt to get the best price when filling it. Can be used to enter or exit both long and short positions. For example, if you are long and fear a drastic price drop, you can issue a stop order to be activated when the contract drops to a given price. Your stop then becomes a market order that the broker will attempt to fill before the price drops even more — even if it requires selling at or below the stop price. Likewise, a short can issue a "buy" stop order if he fears the price will rise.
out/cancel
hand moves across throat; shows that the order has been canceled.
options
In options trading on the CME floor, traders need to indicate whether an order is a put or a call, in addition to using the standard signals to convey other information about the order.
put
call
Summary
This has been a brief introduction to CME’s hand signals. Anyone who works on the Exchange floors needs to know and use these signals perfectly. Hand signals are essential for successful pit trading at CME, and using the wrong signal could result in a substantial loss.
http://www.cme.com/edu/getstr/handsgnl648.html
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