We're back at school and this time we are going to learn to talk like big-time traders. Does that mean you should aspire to be a big-time trader? No, but when you come in contact with one, or if you want to know the lingo, you've come to the right place.

We will start the first class in the same way we would start a foreign language class. We presume nothing and we stay away from the subjunctive. We stick with conjugation.

First, there are two words you must get the hang of immediately, and for those of you who have ever bought or sold any real estate, this lesson will be extremely difficult. When you want to buy you say you are "bidding." When you want to sell, you are "offering." The buy side is the "bid" side. The sell side is the "offer" side. You hit "bids." You take "offerings." When you enter a buy order you say "28 bid for 5000 National Gift Wrap." When you enter a sell order you say "offer 5000 National Gift Wrap at 28."

All of this will seem extremely foreign to many of you. I am not advocating that you switch to this method. "Buy me 5000 National Gift Wrap at 28 and "sell 5000 National Gift Wrap at 28" still gets the job done. But when in Rome, go with bid and offer, Rome being the trading floor of

Goldman Sachs


Morgan Stanley Dean Witter


I found this language to be extremely unnatural when I started out. I used to stand in front of a mirror and say these sequences over and over until they came naturally. Notice how the terminology and the order of the sequences for bidding and offering are quite different. That's all the better not to screw it up. I now find these cadences comforting. So do my brokers, all of who speak this argot.

Now, let's put it in big-time trading practice. You want to move (sell) 50,000 National Gift Wrap. The screen market doesn't work for 50,000 for most stocks. That market may be "good" only for 5000, or if it is illiquid, 500 shares. Good means "will hold up firm at these posted prices." So you go to a "position house," or a firm that can commit its own capital to get the trade done (they get the commission but run risk that they get buried alive in National Gift Wrap) and you say "Bid wanted 50,000 National Gift." The broker checks with this "position trader" who traffics in the name, and that trader comes back with a bid that may or may not be fair depending on how desperate you are to get rid of National Gift." If it is fair you "hit" the bid, or sell the stock there. He then merchandises the block to other clients and gets the commission on the "go out."

Now say you want to buy 50,000 National Gift Wrap. Again, it may not be available on the screen market. So you go to your broker and you say "I need an offering on 50,000 National Gift." He says "I will offer you 50,000 at $28." (He may short you the stock or he may have it in inventory or he may be "in touch" with a seller.)

You "take" that offering. You never ever take a bid. You never ever hit an offering. If you confuse the two ideas people will laugh at you the first time and tell you that you do not know what you are doing the second time. The third time you are out.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to