Jim Cramer's Stop Trading! NYSE Nice

The Big Board is the way to profit from the exchange consolidation craze, Jim Cramer says.
Publish date:

Investors who want to play the exchange consolidation craze must take a look at

NYSE Group


, Jim Cramer said Tuesday on


"Stop Trading!" segment.

Cramer noted the bullish action in the exchange group on the heels of Tuesday's $8 billion tie-up between

Chicago Mercantile

(CME) - Get Report


Chicago Board of Trade


. He said the way to play that is to buy what's likely to become the biggest exchange of them all: the Big Board.

CEO John Thain "has a master plan," Cramer said: "Roll up lots of these exchanges." Once the NYSE does so, Cramer added, the stock will easily have $10 a share in earnings power -- which makes it a legitimate $100 stock, up from a recent $75.

Cramer also cautioned investors to prepare for a very rough day Wednesday.

He said every options expiration week brings one or two down days. With stocks sliding Tuesday off an unexpectedly hawkish producer price number, Cramer said the Dow Jones Industrial Average could endure a 200-point selloff Wednesday, should consumer prices show similar hints of inflationary pressure.

"The expiration can exacerbate any decline," Cramer said, noting the mechanics of option trading ahead of Friday's expiration. After the recent rally that has taken the Dow to record highs, Cramer said there is "no cushion of guys coming in and buying." That's because the shorts have been run ragged by bullish investors, Cramer said.

Cramer emphasized that he doesn't expect to see a sharp selloff, but that one is possible and that if it materializes, "I'd buy on a big drop."

At the time of publication, Cramer had no positions in stocks mentioned.

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