Call buyers are staying tuned to CBS

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Traders are hoping for more good news when CBS reports earnings tomorrow morning.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 14,000 August 55 calls, most of which priced for $0.60 and $0.65. Volume exceeded open interest of 9,891 contracts, indicating that new money was put to work.

These long calls lock in the price where shares can be purchased in the media company. Its all-time peak in 2000 was near $55, which could make some chart watchers expect a big move if that resistance level is surpassed. Using calls lets the investor position cheaply for a breakout while limiting the amount of capital at risk. (See our Education section for more on how to manage risks with options.)

CBS fell 2.07 percent to $52.39 yesterday. It's up 56 percent in the last year, fueled by strong earnings and a spinoff of its billboard operations.

Total option volume was 11 times greater than average in yesterday's session, according to the Heat Seeker. Calls outnumbered puts by more than 20 to 1.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CBS

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As of 12/24/2014, 02:12 PM


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