In the past six years there have been two flash crashes, including one that occurred exactly a year ago in 2015. Jim Cramer will be ready for the next one, and wants investors to be prepared, too.
"Fool me once, shame on you. Fool me twice, and I'm an idiot who deserves the heat," the "Mad Money" host said.
The term flash crash refers a special event when the stock market drops quickly, almost in the blink of an eye. It can result in a dramatic loss of about 1,000 points on the Dow. Both flash crashes had a similar theme: something negative overseas either triggered, or was thought to trigger an event in the U.S. that investors couldn't grasp. It caused an immense amount of fear and paralysis.
In Cramer's perspective, it's not a matter of if a flash crash will happen again, it's a matter of when.
So, to prepare investors, Cramer outlined his rules for the next flash crash.