So some clown emails me and tells me that I should knock it off with the margin-clerk

stuff, that it couldn't possibly be as important as I emphasize it to be.


If anything, I am underemphasizing the whole process of margin in explaining what's happening in this market.

Institutions don't use margins, people do. An unprecendented number of people are in this market, buying things like


(MSTR) - Get Report

because they sound really neat and cool and "Chef of the Future" like.

They tend not to know how to sell. They tend to let stocks run and when they get up high they borrow against them. It is likely that a $20 billion stock like MicroStrategy supports hundreds of millions of dollars in margin purchasing. Those who used this stock as collateral got their legs knocked out from under them today. They didn't think, "Ooh, I don't want to sell that

Millennium Pharma


," or, "I gotta hold on to that



." They just sold it because they didn't have the money to keep it. That's life.

I spent a tremendous amount of time with the margin folks over at

Goldman Sachs

when I worked there. I have executed these sales of Millennium and Medarex (in their '80s incarnations), sometimes without even telling the client. I didn't give a darn where I did it; my client was in violation and I was going to cure it before I lost my job. Losing your job is a powerful incentive to do the right thing.

The selling you saw in the space away from MicroStrategy today was this kind of forced, hacked selling. Getting out ahead of it makes sense. It is very hard to trade through or be oblivious of.

If you think I am overestimating the power of the downside of margin, I can only tell you that you don't have the faintest idea what you are talking about and I will let you have it if you email me otherwise.

You have been warned.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. 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 invites you to comment on his column at