In a market as unpredictable as this one, the Fast Money traders always say watch what’s working and lately that’s been Amazon.
Shares are up more than 15% over the past 3 months, partly due to Street expectations that the latest Amazon Kindle could give the iPad a run for its money.
But the new gadget, called the Kindle Fire debuted on Wednesday, and it left the Street underwhelmed.
”This is no iPad killer,” says trader Pete Najarian. “It doesn’t have a camera, it’s got no microphone and it does not have 3G. There are a lot of limitations.”
But all that might not matter. Amazon did include something that could make the Kindle Fire a absolute game changer. The price of the new gadget starts at $199.
At that price point, it’s accessible for millions of Americans. “You could have a a Kindle Fire as well as an iPad,” muses Jonathan Geller, president and editor in chief of BGR.com in a live interview. “It’s not an either or situation.”
And the Fast pros largely agree the strategy probably turns out to be brilliant. “The Kindle Fire can build on the Amazon eco-system without have to go head to head with Apple,” adds Pete Najarian. “It’s a really unique device that provides new ways to consume media. It’s a reason to buy Amazon," he says.
And it’s not just Najarian who sees it that way. “Institutional money is selling puts and buying calls in Amazon. They seem to believe in the story,” he adds.
Trader Zach Karabell expands. He thinks of Amazon as a company that's at the forefront of new commerce. In that way Amazon is a lot like Apple, he says, with Apple a pioneer in new media.
And he suggests trading the sea change.
“I’d go long Amazon and short brick and mortar retailers. And I’d also go long Apple and short a whole bunch of old tech names.”
The only trader that voices some caution is Cortes who says the debut of Amazon’s Kindle Fire under $200 could simply be a sign that Amazon is worried about the strength of consumers. “The Street was expecting $250. I think they chose the price point because they worried it wouldn’t sell any higher.”
It's worth noting that Cortes is also negative on Apple, but more as a referendum on tech in general, which he thinks faces maco- economic challenges.
And looking at second derivative trades, the gang largely agrees that developments make Barnes & Noble a short. “This is the death knell for the Nook, the B&N e-reader,” says trader JJ Kinahan.
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Trader disclosure: On Sep 28, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian is long (AAPL); Najarian is long (BX); Najarian is long (C); Najarian is long (MS); Najarian is long (HPQ); Najarian is long (AAPL) calls; Najarian is long (WLT) calls; Najarian is long (CSX) calls; Najarian is long (UNP) calls; Najarian is long (OVTI) calls; Najarian is long (JOYG) calls; Najarian has long options in (DLTR); Cortes is long SO; Cortes is long CAG; Cortes is long US Treasuries; Cortes is short AAPL; Cortes is short Nasdaq futures; Cortes is short Aussie dollar; Karabell owns DE; Karabell owns MTW; Karabell owns AAPL; Karabell owns CAT; Karabell owns FDX; Karabell owns GOOG; Karabell owns JPM; Kinahan is long INTC; Kinahan is long GE; Kinahan is long MOS; Kinahan is long TLT; Kinahan is short S&P 500
For Zach Karabell
Rivertwice is long CMI|
Rivertwice is long DE
Rivertwice is short XLF
For Brian Sozzi
For Jonathan Geller
CNBC.com with wires.