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Bulls Are Staying Tuned to CBS

Signage is displayed on the CBS Corp. Television City building in Los Angeles, California, U.S.
Jonathan Alcorn | Bloomberg | Getty Images
Signage is displayed on the CBS Corp. Television City building in Los Angeles, California, U.S.

CBS reported a strong first quarter this week, and traders apparently think that the good news will keep on coming.

OptionMonster's tracking programs detected buying in the September 50 calls for $2.15 and the September 55 calls for $0.85. Calls outnumbered puts by more than 13,000 to 3,000, a reflection of the bullish sentiment.

These calls lock in the price where the stock can be purchased, so they can generate some nice leverage in a rally. Traders use these options because they also limit the amount of money that can be lost if the shares drop.

CBS gained 2.05 percent to $47.35 yesterday after reporting a great quarter Wednesday evening, supported by strong Super Bowl advertising revenue. Ads accounted for more than 60 percent of the company's top line.

The question now is whether the stock can sustain this momentum, as it is interesting to see buyers positioning so aggressively in the September options. Those premiums are high, and CBS will have to make another strong move for them to pay off.

Total option volume in the name yesterday was more than quadruple its daily average in the last month.

—By CNBC Contributor Pete Najarian

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Disclosures:

Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian has no positions in CBS.

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