The meaning of mudra

In Vajrayana, there are mantra, mudra, and visualization. This three components are utilized during cultivations to purify ourselves.

Mudra is one of the three major components of Vajrayana. All Buddha and Bodhisattva have their mudra. Why do Buddha and Bodhisattva have mudra? This is because mudra is a representation, or a symbol for Buddha and Bodhisattva. When the ten fingers come together, it represents the ten dharma realms. From the little finger to the thumb, each represents earth, water, fire, wind, and space, respectively. The entire universe therefore lies within your ten fingers.

Why do we form mudra?
In Vajrayana, when we forms hand gestures (mudra), we form the mudra of our principal deity. This is not simply a symbol. The mudra must synchronize with the mind in order to induce power. In the past, the lineage masters told us that mudra emits aura. To prevent this aura from injuring people, we are told to form the mudra in our sleeves. However, in True Buddha School, everybody form their mudra externally. Do we not afraid that the aura might injure someone? Normally, during cultivation, we perform vajra protection practice and boundary protection. This implies that we are surrounded by vajra wall, vajra net, vajra peg, and vajra flame. As such, it is alright to form the mudra externally because the aura will be blocked by these invisible vajra wall, vajra net, and vajra flame. Apart from this, there is also vajra protectors, who will move the aura away before the aura can injure anyone. Therefore, we need not have to worry about the aura injuring anyone.

The many forms of mudra
According to the lineage masters, the number of mudras is infinite. It is countless as the numbers of Buddha and Bodhisattvas. It is virtually unlimited. The mudra for flower, incense, lamp, tea, and fruit in the True Buddha School is different from the general mudra used for the same purpose. We use symbolic mudra. Does this not look like a flower? (GM demonstrate a flower-like mudra) This is also flower, but it is a flower that is half open. We use mudra that represents flower that is fully open, representing that we reach the most sentient beings. Therefore, our flower mudra is different from the general flower mudra. Although there are only ten fingers on two hands, the number of mudra that can be formed is unlimited. The mudra for flower, incense, lamp, tea, and fruit are very wonderful and clear. When forming the flower mudra, we visualize that flowers are everywhere. The same is done for incense and the others. We visualize when we form mudra for flower, incense, lamp, tea, and fruit. This means that our mind and mudra are one. At this very moment, it creates power. Therefore, if you put your mind into it, using the power of your mind to meld with the mudra, it creates a power which is unbounded

Source: http://www.tbsn.org/english2/talk.php?id=17&classid=2