Hand signal" is the sign language used by traders to transmit basic information on the trading floor. The use of hand signals on the trading floor is said to have originated for many reasons. Two major reasons for the use of hand signals are:

In an environment where the difference between potential profits or losses could be one second, fast communication between brokers and traders is very important. It is much faster for traders and brokers to communicate by hand signals across the trading floor, as opposed to walking back and forth between the trading pit and the order desks above it.

Noise Level
The noise level in trading pit is very high and makes it near impossible to clearly hear, which makes it sensible to communicate by hand signals.

Common Signals
The 'Buy' signal is represented by the palms facing the head.

Source: http://www.futurestech.net/hand1.htm

The 'Sell' signal is represented by putting up the hands with the palms facing away from the face.

Source: http://www.futurestech.net/hand1.htm

The 'Stop' or stop order signal is represented by putting a fist into a palm.

Source: http://www.futurestech.net/hand1.htm

The 'Out' or cancel order signal is represented by slashing hand across throat.

Source: http://www.futurestech.net/hand1.htm
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