Open Outcry

Open outcry is the original and, some would say, the best method for matching buyers and sellers. It allows buyers and sellers to see each other face-to-face, which lets them incorporate information based on the other party's facial and body language into their decisions. Considering that price changes often stem from only two emotions (fear and greed), many traders prefer the open outcry system.

Despite the assumption that open outcry systems must be less efficient and more costly than fully electronic trading systems, many argue that they are as efficient as their computerized counterparts. In addition, some believe that open outcry can prevent collusion because literally any trader can enter a market and take advantage of wide spreads; this is often not the case for electronic trading systems whereby a small number of large market makers could keep spreads wider than necessary.