“open outcry” on a stock exchange trading floor.
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Before computers, the way that stocks were bought or sold was by physically going to the stock exchange and finding someone who wanted to trade with you.
“Open outcry” is basically a public auction. I say “I’m selling 100 shares of ABC corp for $50 a share, who wants them?” You yell “I’ll give you $48 a share,” someone else yells “I’ll give you $49 a share,” I sell to the guy who offers $49.
The reason it was done was that some exchanges required all bidding and selling to be done out in the open, in real time, so that everyone involved had the best chance to buy and sell and had the most information… which theoretically leads to the best price.
Imagine an auction at a fancy auction house like you see in movies. A single seller calls out what’s for sale and people use hand gestures to offer a bid all against each other. It gets fast and chaotic and almost theatrical with all the shouting and hand signaling, but it works.
Now imagine everyone in the is a buyer AND a seller and a million auctions are going on at once. Through a mixture of hand signals, shouting, and gestures people communicate extremely quickly what they are buying, selling, pricing, new pricing, more buying, less selling, new pricing. All at the same time, it’s chaos, but organized chaos. That’s open outcry.
As you can imagine, with the advent of computing it’s becoming less and less of a real thing more financial theater.
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