The Hanky Code is a traditional form of signaling to others what your sexual preferences and interests are. Gay men used this code to communicate with each other in the noisy and distracting environment of gay bars. Although not as widely used these days, it is still a worthwhile resource and is, among those who know, a great conversation starter.
Hankies are usually worn in either the back left or right pockets, however, they can also be worn around the wrist, or as an armband, around the ankle or leg at the thigh above the knee, or around the neck with the knot/tie going either right or left. Other objects can also be used such as keys and key chains or watch fobs and even a set of handcuffs (Bondage), to let people know if you are 'top' or 'bottom'. Left = Top/Active and Right = Bottom/Passive. If worn in the back on the center belt loop, it translates as 'versatile'.