The Important Role of Hand Signals

The usc of hand signals is an aspect llf futures

trading that has ah\ays f<Iscinatcd the public.
Surprisingly. the Rules and of th._,
Chicago Board ofTradc don't require
hand signals during open outcry trading. But. in
most acti\ c markets. hand signals arc
in ing \crbal bids and offers. '\nt using h<llld
signals or using them can lead to
mistakes.
Hand signals indicate price and quantity as
\\hcther a trader is buying or selling .. \ trader has
the palm of his hand LlL'ing i1mard if he is bu) ing
and nllt\\;ml if he is selling.
BUY
T
l
SEll
\
I

rJ ,J
I ; c i _'::J Jt _;::,_,
I
7 fc: cj J .. Lj.
v
I : i \ I l : t
l (.
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Designating Quantity in Financial
Futures & Options
Traders in financial futures and options call out
quantity during open outcry trading to indicate the
number of contracts they \\ant to buy or sell. To
ensure accuracy. they abo c:qwcss quantity through
hand signals. as i llustratcd bdm\.
1 CONTRACT 2 CONTRACTS


3 CONTRACTS 4 CONTRACTS
2
5 CONTRACTS

' -
. . ---: -::::;i.
7 CONTRACTS

I
9 CONTRACTS
3
6 CONTRACTS

8 CONTRACTS

I \
I
I
\.
\.
i
10 CONTRACTS
Cli!lfillliL'tf Oil j)(('.!,L' .f
20 CONTRACTS

i
I
40 CONTRACTS

60 CONTRACTS
30 CONTRACTS

50 CONTRACTS

\
70 CONTRACTS
80 CONTRACTS 90 CONTRACTS


I 100 CONTRACTS I
1,000 CONTRACTS
Combining Quantities in
Financial Futures & Options
I u l'lllllj1Ullllll I (1 coll-
ur tl'cidl'l'' cl comhlllcltll111
ui' ''t'll:tk
hn L'\Cllllj1k. 11hen ](1 the
111de\ linger held tll till' tu llldil'ctlL' I()
ctlld thL'Il the li11gl'l' j1Lteed
tu till' chill tl1 hl'lllltrach l\11 tlltctlul' I (1
eolltrctch.
LikL'\\ ti11 l'lllllrclch. t\\ll tingeh uie hl'id to
till' liHehectd to JJHiicalL' cllld the11 .\
ilL'Id tu tile chin ttl i11dicalL'
X eulltrctl'h t\11 ui' etllltl'cll'h.
10 CONTRACTS
20 CONTRACTS
6 CONTRACTS
10+6=16
\
I
8 CONTRACTS
20 + 8 = 28
i
'
I
Indicating Price in Financial
Futures & Options
Futures
Pncing in bumb and in pninh
and Lach puint at S 1.000 and each
_>2d at S_> 1.2). lkcause each llltenal bet\\een I J2
I 32 needs tube 1i1any uf the hand
signab at\ ariuus price in ten
Olicntimes. traders alternate \crtical and hori;on-
gestures tu clearly prices. i.e .. I
is indicated by the imlc\ finger held \Crtically. but
(J .12 is shl1\\ n hy the indc\ linger held
.\ \ cr: common price in ten al is the mm e bel\ wen
-'I 3.2 and I 3.2. It may be traced and retraced
numerous times in a single day. To minimi;c con-
fusion. it is customary that 31 32 is signaled\\ ith
the pinky linger and that I 32 is signaled\\ ith the
indc\ tingcr.
\\hen the market is at e\cn. e.g .. 97-00. the
clenched list is held \Crtically and mo\cd from
side to side \\ith the thumb e\tcmkd to clearly
indicate a price of e\ en.
It is critical that traders and brokers follow the
market carefully and be \ery clear with their hand
signals and open outcry.
1/32,11/32,21/32 2/32, 12/32, 22/32
8
3/32, 13/32, 23/32 4/32, 14/32, 24/32


5/32,15/32,25/32 6/32, 16/32, 26/32


7/32, 17/32, 27/32 8/32, 18/32, 28/32
continued on JWge I li
9
9/32, 19/32, 29/32

30/32

<E------
32/32 (EVEN)
10
I
I
I
I
10/32, 20/32

31/32

Options
lkcausc options arc priced in ttcb one hal I' the
ui' tilL' underlying futures, optiutb un
bond and nolL' l'uturL'S priced in h-+tlh.
rhc signals !'or bund 11lllc:
uptiuns l'ullo\\ the sctmc patlL'rn as the ing
futures. The require that
he carcl'ttl tu dii'fcrcntiatc the prices\
the s;unc signals.
For c'\ctmpk:
2/64, 12/64, 22/64, 32/64,
42/64, 52/64, 62/64

11
9/64,19/64,29/64,39/64,
49/64, 59/64

Combining Price and Quantity in
Financial Futures & Options
13u)crs indicate price first and then quantity.
Sellers du _just the oppusitc: indiGllc qw1ntit) first
and then price.
Traders so usc an important \ crbal distinction
that if the\ to bll\ nr sell. Buvcrs bid
. . .
price FOR quantity. Sellers otTer quantity .\T
pncc.
Buyers Bid Price "for" Quantity
FOR
9/32

1. .:n '
f 1 11 r !
\ l u ry

( \
I v _I I\\
\ I /
/ I
20 CONTRACTS
The outcry \\ould be "9 for 20."
Sellers Offer Quantity "at" Price
AT
em; ____ _.

\
I I
I I
/
20 CONTRACTS
The outcry \\ould be "20 at 9."
12
9/32
Designating Quantity in Grain
Futures & Options
In grain futures. each tingcr represents nne
nf 5.000 bushels. Traders call out the numbL'r tlf
bushels rather than the number nf contrach
For C'\ampk. traders refer tn one uf 5.000
bushels ti\ c" than "tlnc."
In grain uptinns. traders call nut the number nf
contracts traded rather than the number nf bushck
(]rain nptinn hand signab for quantity arc simii<Ir
to those used in the financial markets.
In grain futures. quantity is generally indicated b)
the fingers held in a\ crtical ( Uj)\\ard) position. Fur
quantities bct\\Ccn 50.000 and I 00.000 bushels,
sometimes no specific hand signal is \\'hi\c
a trader may hold up both hands. he ottcn relics on
open outcry to identitY quantities bct\\Ccn 5lUHHl
and I lHUlOO bushels.
5
(5,000 bushels/
1 contract)
13
F
1' i


\
10
(10,000 bushels/
2 contracts)
COilfilllll!d 01/ j)(tgc f.j
15
(15,000 bushels/
3 contracts)

25
(25,000 bushels/
5 contracts)

35
(35,000 bushels/
7 contracts)
14
20
(20,000 bushels/
4 contracts)

30
(30,000 bushels/
6 contracts)

40
(40,000 bushels/
8 contracts)
45
(45,000 bushels/
9 contracts)

100
(100,000 bushels/
20 contracts)
50
(50,000 bushels/
10 contracts)

Indicating Price in Grain
Futures & Options
Generally traders signal only the last fraction of the
\\hole price. Grain futures are traded in ticks of l/4
cent per bushel. Options on grain futures use ticks
that are half those of the underlying futures. This
means ticks in options on soybeans, corn, wheat,
and oats are 1/8 cent.
In the grain markets, the price at which a trader is
making his bid or offer is usually shO\vn by the
fingers held in a horizontal (sideways) position.
Futures
J
1/4 1/2


3/4 full cent
16
Options
1/8
2/.8 or 1/4

.
-----
3/8 4/8 or 1/2

.
-----
1 5/8 6/8 or 3/4

-----
7/8
I full cent
Combining Price and Quantity in
Grain Futures & Options
Traders and brokers use combinations of hand sig-
nals for price and quantity to indicate the transac-
tion they wish to make. As previously mentioneLl
grain prices are usually signaled with horizontal
gestures, while quantities are usually shmvn with
vertical gestures.
Buyers Bid Price "for" Quantity
A trader vvho is buying would first signal the price
and then the quantity.
1/2 CENT
15
(15,000 bushels/
3 contracts)
The outcry would be "A halffor 15 ." e
Sellers Offer Quantity "at" Price
A trader who is selling would first signal quantity
and then price.
15
(15,000 bushels/
3 contracts)
AT
The outcry would be "15 at a half."
1/2 CENT
This presentation is not all-inclusive. These
are the most commonly used hand signals in
the financial and grain markets. Variations on
these signals are used in other Chicago Board
ofTrade futures and options markets.
EM91-4
~ 1995, Board of Trade of the City of Chicago
The information in this publication is taken from sources believed
to be reliable. but it is not guaranteed by the Chicago Board of
Trade as to accuracy or completeness, nor any trading result. and is
intended for purposes of information and education only. Nothing
herein should be considered as a trading recommendation of the
Chicago Board of Trade. The Rules and Regulations of the Chicago
Board of Trade should be consulted as the authoritative source on
all current contract specifications and regulations.
2.95.1 0000