Trader sees limited downside in CBS

optionMONSTER

CBS has been an explosive stock, and a pullback is the last thing on the minds of some investors.

optionMONSTER's tracking programs detected the sale of about 5,300 May 45 puts for $0.95. Volume was more than 11 times open interest at the strike, indicating that a new position was initiated.

If CBS remains above $45 through expiration, the puts sold short will expire worthless and they'll keep the $0.95 as profit. Below that level they'll have to buy the media stock, but including the credit earned their entry price would be $44.05. (See our Education section for more on when it makes sense to sell puts.)

CBS rose 1.11 percent to $46.26, and is up 22 percent so far this year. Earnings have mostly been strong, but the real catalyst recently was a plan to spin off its billboard properties into a real-estate investment trust. The next quarterly report is scheduled for May 1 after the puts sold today expire.

The trade dominates activity in CBS today, according for more than half of the total option volume.

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