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ICE Is Red Hot

Thursday, 18 Oct 2007 | 8:48 PM ET

NYSE-Euronext has a hole in its business that Intercontinental Exchange could fill quite nicely, Cramer told a crowd of rowdy Georgia Tech Yellow Jackets. The Atlanta school was his latest stop on Mad Money’s wildly popular Back to School Tour.

Oil hit passed $90 in electronic trading Thursday, and NYSE-Euronext is missing out on all the action. Meanwhile, Intercontinental is ablaze with activity. Why? Because Intercontinental is a derivatives exchange, which is where oil trades, and that means ICE makes money every time there’s a trade. In the U.S., NYX deals only in equities. So if NYSE-Euronext were to buy Intercontinental, it would be “a marriage made in heaven,” Cramer said.

ICE ICE Baby
The InterContinental Exchange is the best way to play the volatility in oil we're seeing, says Mad Money host Jim Cramer.

Cramer figures NYX could pay upwards of $180 for Intercontinental, maybe even $200. In fact, he thinks ICE could get $200 on earnings alone. That’s a hefty jump from its present price of $160, and a healthy profit for investors.

Intercontinental also has a clearinghouse business it got by purchasing the New York Board of Trade to offer NYSE-Euronext. A clearinghouse handles the delivery of different futures contracts, and Cramer said it’s “the back office where real fortunes are made.”

Even if Home Gamers can only afford one share, Cramer recommended they buy Intercontinental Exchange.

Questions for Cramer? madmoney@cnbc.com

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