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Trillian's avatar

Can anyone explain these "numbers" to me?

Asked by Trillian (21064 points ) June 1st, 2012

This is actually three numbers questions, concepts which I have never understood.
The first is “running numbers”. What? I hear it in movies and on crime shows; “He’s a numbers runner.” I saw a good example on Malcolm X where the people would say a three digit number to a guy, but it isn’t clear to me how a winner is determined. Some guy who does or does not write the numbers down, and later some number is somehow picked? What? Who makes money from this and how?
Second; craps. I see that on movies too, and all I’ve ever been able to determine is one guy throws dice and a bunch of other guys holler and give money back and forth. The guy collecting all the money seems to know who gets some back and who doesn’t, but I can never tell how.
Third; the Stock Exchange. It’s very confusing to me. The floor is crowded, they’re all hollering and performing some arcane acts that I can’t follow. Some guys point to others and write something down, the camera keeps panning to numbers going up or down on a board, and I can’t determine how they can keep track of who hollers what. I understand that purchases are being made, but how do they do it? If everyone on the floor is jumping up and down, how do they later know that they got what they were trying for? Then the buzzer sounds and it all stops.
Can anyone enlighten me on any of these mysterious activities?

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8 Answers

marinelife's avatar

Running numbers. “NUMBERS was a lottery type game for the masses and was run by organized crime. Since the daily picks of the customers had to be brought to a central location for processing, the syndicate employed “runners” to go to the various bars, barbershops, corner groceries and such where the customers made their picks.” The Phrase Finder

Craps. “If the shooter rolls 7 or 11, you and the shooter win, and the shooter keeps the dice to roll again. If the shooter hits 2, 3, or 12, the bet is lost but he remains the shooter and continues to roll the dice until he either makes his point and you both win, or he rolls a 7 and the bet is lost.

In the above case, you have bet with the shooter. If you want to bet against him, you place your bet on the “Don’t Pass” line and the rules are entirely reversed except that if, on his first roll, the shooter rolls 12, it is a standoff (you neither win nor lose).

After the roll has begun and the shooter has a point, you can make a bet by placing it on the “come” line. The same rules apply to you as if the shooter were making a first roll: it the next roll is 7 you win; if it is a 2, 3, or 12, you lose; if it is any other number, that becomes your “come point” and, for you to win, that number must be rolled again before a 7 is rolled on the dice.. If a 7 comes first, the bet is lost.

If you are a beginner start with a “pass” line bet and then perhaps try a “come” bet. And don’t worry about making an error. The dealers will be happy to explain more about the game to you.” Mississsippi Casinos

Stock Exchange. “Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auction is used in stock exchanges and commodity exchanges where traders may enter “verbal” bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders. Orders executed on the trading floor enter by way of exchange members and flow down to a floor broker, who goes to the floor trading post specialist for that stock to trade the order. The specialist’s job is to match buy and sell orders using open outcry. If a spread exists, no trade immediately takes placeā€”in this case the specialist should use his/her own resources (money or stock) to close the difference after his/her judged time. Once a trade has been made the details are reported on the “tape” and sent back to the brokerage firm, which then notifies the investor who placed the order. Although there is a significant amount of human contact in this process, computers play an important role, especially for so-called “program trading”.” Wikipedia

CWOTUS's avatar

You don’t hear so much about “numbers rackets” any more, since the states are running their own Lottos. But that’s what “the numbers game” was: as @marinelife explained, it was an illegal lottery-type betting scheme run by organized crime. (I believe that the payoff was better than any of the state-run lotteries, but of course it was illegal and didn’t have the “education” earmark that state-run games nominally have.)

I don’t understand any more about craps than @marinelife explained above. Now it actually do seems like I understand it a bit anyway.

Assuming that you understand what stocks themselves are, the action in the trading pits of the NYSE is a live fast-motion auction, where prices go both up and down (as opposed to the auction you’re familiar with where prices are always and only bid “upward”). One of the other fundamental differences with the NYSE is that the auctioneer may also purchase from his “audience”. When they reach a buy or sell price, then the parties record the number of shares, the price and the time of the trade, as well as whether it was a “Buy” or “Sell”, obviously, and the number of shares traded. That generally gets marked against a particular owner’s account. Traders can also trade on their own behalf; traders who do that are often known as “market makers” for particular stocks, because they’ll provide the other side of any trade you want to make in a particular stock. If you want to buy GE stock, then a market maker will sell you some; if you have some to sell, then he’ll complete that trade, too.

Trillian's avatar

So ok, but what I’m really asking is how they keep straight who said what number, or who bet what. On tv, the men are usually on the ground outside somewhere, nothing is written anywhere, and they’re all just hollering. So how does the guy collecting the money tell who bet what? The numbers guy doesn’t write anything down. On the stock exchange floor there will be one or two guys standing and taking notes, while a bajillion guys shout at them. I can’t understand how they keep track.

CWOTUS's avatar

The details of exactly how transactions are recorded and completed in any of these activities is somewhat beyond my powers of description. For one thing, I’ve never actually participated in any of them. It’s sort of like cooking or any other process that can be described “from the bird’s-eye view at 20,000-foot elevation” to the actual details of how a sauce is created, stirred, tested and cooked over a flame that is “just-so”.

I can describe to you how to rig a boat and sail, for example, but until you’ve actually done it, you don’t really “know” the movements of sailing, no matter how good my description. And if I were to describe something like sky-diving, for example, which I haven’t done, then my description would be that much more removed.

Obviously there are mechanisms at work for recording betting slip to bettor information, to settle craps bets on the spot (no recording needed, apparently), and to satisfy buyers and sellers of stocks in the trading pits (and dispute resolution processes to take over when the normal recording and fulfillment practices fail). Otherwise, those institutions and practices wouldn’t have grown to be ongoing practices.

zenvelo's avatar

Having worked on trading floors my a whole career, it is a bit mysterious until you’re in the middle of it.

A Floor Broker (someone holding an order) will call for a market and size, meaning “give me prices where you will buy and where you will sell” and also, in hundreds, how many share are you willing to trade at those prices.

The person who is first withe best price has priority. The broker says ‘buy ‘em” or “sold” and communicates the size of the order. Each trader writes down the badge number of the other on a ticket, the tickets are turned into the Exchange and matched and the trade completed via computer.

It takes practice to understand because the traders use slang and jargon to get the trade done quickly. It was more confusing in the old days (pre-2000) when we traded in 16ths and eighths.

Meanwhile, the market makers (the people trading for their own account) are constantly calling out bids (what they will pay) and offers (where they will sell) to keep the prices up to date. I work on an options floor, and we trade hundreds of options on each stock. So you might hear “How are the softie augie 31 calls?” Meaning, “what are the prices to trade the right to pay 31 dollars a share for Microsoft stock between now and the third Friday in August?”

Very little of this continues because most of it is computerized now.

By the way, if someone “forgets” a trade they did, their reputation goes in the sewer, and the next time they try to compete for an order, the floor broker will most likely say, “oh, I’m sorry, I didn’t hear you, I think Charlie was first.” It’s a very efficient form of self policing.

Trillian's avatar

@zenvelo Fantastic, that makes a little more sense to me, especially the bit about the numbered badge. Thank you!

dabbler's avatar

Those guys and gals in the open-outcry systems take notes immediately and there is a confirmation of the trade details as a “handshake” either verbal or visual. If the handshake doesn’t happen there is no trade.
At NYSE the folks in open-outcry trading are right next to their trade entry terminals and they or their clerks enters trades immediately.
At the CME there are sector “pits” where trades are done by reps of various firms, who wear distinctive vests and big numbers to identify the person with whom you’re trading. Through a series of vocal calls and manual signals seller agreed with buyers. They are both taking notes on little pads of paper and electronics, and immediately relay the information to clerks watching from just outside the pit at their trading system terminals.

srmorgan's avatar

The numbers was a lottery type game, as mentioned previously, that was popular in lower-class and working-class neighborhoods in the larger cities.
The “number” was a three digit number that could be based on different sources. I remember the old men where I grew up going through the local tabloid, The New York Daily News, which listed the total take for each race at Aqueduct or Belmont Park. I seem to recall that the number was the last digit of the total take for the 1st, 2nd and 3rd race at the track.

The numbers runner could be anybody. He, generally a he, would write down numbers on slips but the good ones could remember who bet what. The betting slips used to go up the line to someone who was making the market on the bets and any winnings were paid off to the numbers runner who made the payout.

The numbers paid out at 600 to 1 where the true odds were 1,000 to 1. This is a sucker’s bet but then so is the lottery.

The numbers were popular because you could bet as little as a nickel and you got credit from the numbers guys until payday or some other deadline. When the state lotteries were introduced in the mid 60’s, you could not and still can not play the lottery on credit. So the numbers took a long time to die out.

SRM

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