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Karen Finerman's E-Book Trade

It appears that Barnes & Noble has stepped up its fight in the small but highly competitive market for electronic books.

Earlier this week the company announced the launch of a new e-bookstore offering titles that can be read on a variety of devices including the iPhone, BlackBerry and most personal computers.

Analysts said the multi-format approach gives Barnes & Noble an edge in appealing to a wide array of consumers in this developing market.

"Instead of just betting that one device will win, they are betting on the whole category of digital reading," says Sarah Rotman Epps, a media analyst for Forrester Research.

"As the world's largest bookstore, we're trying to get digital books into the hands of people who want them — any device, any time, anywhere," says Barnes & Noble president William Lynch.

The company plans to offer 700,000 titles initially and up to 1 million within a year. By contrast, Amazon offers roughly 325,000 titles for the Kindle.

What’s the trade?

Just like the iPod revolutionized the way people listen to music I think Amazon's Kindle will change the way people read, speculates Karen Finerman.

However, it's too hard to game the winner right now, however I do think you can play the loser - the brick and mortar book store.  

But don’t short Barnes & Noble; they’re demonstrating an ability to adapt to this sea change. Instead I’d shortBorders .

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Trader disclosure: On July 21st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (APPL), (BAC), (DRYS), (EEM), (FCX), (FXI), (INDY), (SBUX), (UNG); Grasso Owns (OXY), (WMT), (XLF), (CSCO), (V); Grasso's Clients Own (UNH), (V), (WMT), (USB), (OXY); Najarian Owns (AAPL) Call Spread & Put Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (ISRG) & (ISRG) Call Spread; Najarian Owns (JNJ) Call Spread; Najarian Owns (MS) & (MS) Call Spread; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (V) & (V) Short Calls; Najarian Owns (YHOO) Call Spread; Finerman Owns (RIG); Finerman's Firm Owns (MSFT), (NOK), (PBR), (RIG), (TGT), (TBT), (WMT); Finerman's Firm And Finerman Own (BAC) Preferred Shares; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (IJR), (IYR), (IWM), (MDY), (SPY), (USO)