Trading in the Dark - TheStreet

Who turned out the lights? That's what it felt like to trade during that air pocket. The chaos of trying to trade more than 2,500 shares of an

E.piphany

(EPNY)

or a

Vitria

(VITR)

was terrifying. Market makers didn't know where the real markets were. People were making 15-point spread markets in stocks that typically trade in point increments. It was like we were all trading in the dark.

And to think, it was all because of some lousy words in a

Lucent

(LU)

10-Q

, a crummy

3Com

(COMS)

quarter and a pathetic

Corel

(CORL)

blow-up? What would have occurred if something bad had actually happened? What would you have tried to do if you were an institution and you tried to trade 25,000 shares?

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The answer? You couldn't do it. It just wouldn't happen anywhere near these prices. It would have been a blackout.

How bad was it? I went in to sell 5,000 shares of

Tibco Software

(TIBX)

. The stock came down 10 points in the time that I wanted to get the trade done. By the time I got the report I wanted to buy the stock back! But no way, it wasn't there. Ten points of profit obliterated.

I am not trying to scare anyone. These stocks trade in 10-point increments going up, they are surely going to trade in the same exaggerated increments going down.

What I am trying to highlight is that the individual has the real leg up in these in the dark markets. He can get his 200-share trade done. I can't get my 5,000 share trades done though. Not when the stocks are going down. Not when they are in free-fall.

Something to remember, confirming the oldest lesson in the world: You have to sell them when you can, not when you have to. You couldn't sell during that one interlude without being annihilated on the fills. Scary. Maybe my "take something off the table" resonated beyond a few readers!

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James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of the original publication, his fund was long Lucent and Tibco Software. 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

jjcletters@thestreet.com.