Open Outcry

Posted in Finance, Accounting and Economics Terms, Total Reads: 325
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Definition: Open Outcry

Open Outcry is a method of communication where bids and offers are made in the open markets. It gives a chance for all the participants to compete for the order enabling a best price. In this method, dealers or brokers actual speak about prices loudly with hand gestures which communicates about the price and message. Through this information is conveyed about buying and selling of stocks or commodity. 


Example

Open outcry method is now getting replaced by electronic trading system. Its proponents believes that it is faster, cheaper and more efficient. Also they claim that is less prone to the market dealers.


Examples of markets which still use this system are New York Mercantile Exchange and the London Metal Exchange. The supporters of the Open outcry say that it helps the traders. The traders are able to make a physical contract thereby helping them to understand the other party’s emotions.


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