Yesterday the bulls snapped up the December 27 calls early, bought consistently on the ask prices of 75 cents and then 80 cents, according to OptionMonster's real-time tracking systems. About 5,900 traded by the end of the session versus previous positioning of 1,912 contracts, indicating that these are new positions.
CBS rose 2.30 percent to $25.82 and is up from below $20 in early October. It's been building support above $24 in the last two weeks and, based on the call buying, investors apparently think that the next direction is higher.
The long calls lock in the price at which CBS stock can be bought; so the higher the shares go, the more they're worth. They can deliver some major leverage to the underlying but can also expire worthless if the CBS fails to move.
More than 10,000 contracts traded overall in the name yesterday versus an average of about 6,000. Calls outnumbered puts by about 3 to 1, a reflection of the bullish sentiment.
—Najarian has no positions in CBS.
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.