Listen to a Business English Dialogue About Open outcry
Arianna: Hey Anthony, have you heard of something called open outcry in finance?
Anthony: Yes, I have. It’s a method of trading where traders shout and use hand signals to communicate buy and sell orders on a trading floor.
Arianna: That’s right! Open outcry was commonly used in stock exchanges before electronic trading became prevalent.
Anthony: Exactly! It was a way for traders to quickly execute trades and establish market prices through vocal and physical interactions.
Arianna: That sounds interesting. How does open outcry compare to electronic trading?
Anthony: In electronic trading, orders are entered into a computer system and matched automatically, whereas in open outcry, traders negotiate directly with each other on the trading floor.
Arianna: I see. Are there any advantages or disadvantages to using open outcry?
Anthony: One advantage is that open outcry allows for real-time price discovery and can create a sense of camaraderie among traders. However, it can also be chaotic and less efficient compared to electronic trading.
Arianna: Got it. Thanks for explaining, Anthony. Open outcry seems like an intriguing method of trading with its own unique dynamics.
Anthony: No problem, Arianna. It’s a fascinating aspect of financial markets history that has largely been replaced by modern technology.
Arianna: Absolutely, Anthony. Understanding the evolution of trading methods can provide valuable insights into the dynamics of financial markets.