Bulls Stay Tuned to CBS

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- CBS ( CBS) reported a strong first quarter this week, and traders apparently think 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 85 cents. 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% to $47.35 Thursday after reporting a great quarter Wednesday evening, supported by strong Super Bowl advertising revenue. Ads accounted for more than 60% 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 Thursday was more than quadruple its daily average in the last month.

Najarian has no positions in CBS.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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