My Hair-Raising Ride

By RICHARD BEHAR

AFTER TAKING TWO MINUTES TO EXPLAIN THE BASICS, HARVEY Houtkin opens a trading account in my name and shows me to the driver's seat. To my right a hairdresser has just plunked down $39,250 on a stock, and she's riding it like a champion surfer. To my left a computer screen is alive with flashing rows of swiftly changing prices. "Remember, the trend is your friend," says Houtkin. Suddenly I'm feeling lightheaded.

Houtkin hits the keyboard, and prices for the stock of Cisco Systems, a volatile computer company, pop up on the screen. Fortunately, I'm told to ignore everything except two columns I can barely read anyway. One lists the prices that 47 marketmakers (firms like Morgan Stanley and Dean Witter) are willing to pay for Cisco. The second shows what they're willing to sell it for.

Suddenly a blue light appears on the screen, indicating that a marketmaker has moved his bid price from 52 1/2 to 52 3/4; other firms soon follow. With Houtkin's prodding, I scream for an All-Tech order clerk to buy me 10 shares (I'm a low roller). Within seconds I've acquired the stock for 52 3/4 a share.

The wave continues to roll forward, so I ask the clerk to sell my holdings at 53, netting me a fast -- if meager -- $2.50 gain. The purchaser at the other end was Salomon Brothers. Of course, if I had been a regular customer at All-Tech, I would have bought 1,000 shares and earned $250 (minus an $80 commission) on the transaction. Not bad for a few minutes' work.

While I'm busy gloating, Houtkin punches up Amgen, a volatile biotech stock that is suddenly on its way down. I decide to sell 10 shares short at 38 3/4; J.P. Morgan is on the other side of the trade. Now I have to buy the shares in order to deliver them to Morgan, hopefully at a lower price. But the downward wave I thought I was surfing on turns out to be little more than a splash in a puddle. Amgen edges up to 39 in most marketmakers' quotes! If it climbs higher, I'm really in trouble. "Cut your loss! Cut your loss!" shouts Houtkin, so I ask the clerk to buy any shares remaining at 38 7/8, which Kidder, Peabody provides. My loss: $1.25 -- or $125 had I been a regular customer. Easy come, easy go. But it sure beats blackjack.