CBS bulls not turning the channel

David Russell (
June 10, 2014

CBS has been rebounding from a big selloff, and the bulls are betting that it will keep going.

optionMONSTER's Heat Seeker monitoring program detected the purchase of bought 37,019 Weekly 60 calls expiring on June 27 for $2.23. Some 24,679 June 55 calls were sold at the same time for $5.60, with volume below previous open interest in that strike.

It appears that an existing long-call position was closed and rolled from one contract to another. Making the adjustment let the investor collect a credit of $5.5 million while keeping him or her exposed to further potential gains in the media company for an additional week. (See our Education section for more how to manage positions more effectively with options.)

CBS is up 0.15 percent to $60.83 in afternoon trading. It made an all-time high of $68.10 in March, pulled back along with other media stocks, and then found support around the same $55-$57 area where it bounced in November and February.

The stock has also spent the past two weeks consolidating above its 50-day moving average, which could make some chart watchers expect another push to the upside.

Total option volume in CBS is 5 times greater than average in the session, according to the Heat Seeker, with calls outnumbering puts by a bullish 6-to-1 ratio.

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