By David Russell of OptionMonster
NEW YORK -- Option traders are looking for CBS (CBS) to regain the upward momentum it lost earlier this year.
OptionMonster's tracking programs detected the purchase of about 10,000 May 62.50 calls Thursday, most of which priced for $1.65 to $1.75. The volume was almost triple the previous open interest in the strike, indicating that new positions were initiated.
Long calls lock in the price where investors can buy a stock, letting them cheaply position for a rally. The contracts can generate significant upside leverage but can expire worthless if the stock remains below $62.50.
CBS fell 3.82% to $59.98 Thursday, following a 3% pop just one session earlier. The media name has been a steady winner for the last two years, and Thursday's call buyers are looking for the stock to resume its uptrend after pulling back since mid-March. The company's next earnings report is scheduled for May 8.
Total option volume in CBS was triple its daily average for the last month, with calls outnumbering puts by more than 4 to 1.
Russell has no positions in CBS.