Trade of the Day: Nordstrom, Inc. (NYSE:JWN)

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Today, we’ll look to establish a position in a fashion specialty company that operates retail and credit business segments. Nordstrom recently announced a quarterly dividend and shareholders of record on August 29 will be given a dividend of $0.37 per share on September 13. This represents a $1.48 annualized dividend and a dividend yield of 2.86%. And while yield is attractive, that’s not the only reason I’m bullish on the stock.

After a year of sharp declines that wiped out gains made since 2011, JWN has broken the downward trend and is currently poised to make a run up to major resistance just shy of $60 per share. This gives us a favorable window of opportunity in the short term with the stock trading at $52.14. But instead of shelling out a large sum of capital to buy the underlying stock, we’ll elect to go with the options on this trade.

Buy to open the Nordstrom (JWN) Oct 55 Calls (JWN161021C00055000).

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. It’s the perfect “bridge” between investing in ordinary stocks and the turbocharged world of options trading. In Maximum Options, he brings you his personal trades using high-probability, “professional grade” strategies.

Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.


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