Scott Bauer's Bearish Nordstrom Trade

Scott Bauer of Trading Advantage spoke on Bloomberg Markets about the recent rally in Nordstrom, Inc. (NYSE: JWN). The company became a target of criticism by President Trump after it decided to stop selling Ivanka Trump's fashion line. The stock initially traded sharply lower, but it managed to recover and to gain around 6.50 percent in two days.

Bauer thinks Nordstrom can't continue to move higher, because there is no fundamental or technical reason for it to trade higher. The company is going to report earnings in two weeks and Bauer wants to place a bearish bet ahead of earnings. He wants to buy the March 42.50/40 puts for $0.60. The trade breaks even at $41.90 and it can maximally make a profit of $1.90.