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January 17, 2013  Thu 5:16 AM CT

CBS has been extremely active recently, and the bulls came back yesterday.

optionMONSTER's Heat Seeker system detected the purchase of more than 11,000 March 42 calls, most of which priced for $0.50. Volume was more than 12 times the strike's open interest at the start of the session, indicating that this is fresh buying.

Long calls lock in the price where investors can buy shares, so they can generate nice leverage in the event of a rally. (See our Education section)

And that's exactly what it looks like will happen, because the broadcaster made a big announcement after yesterday's close. CBS plans to separate its billboard businesses, forming a real-estate investment trust for its U.S. properties and selling its overseas properties.

CBS, which fell 0.42 percent to close the regular session at $37.94, shot up to $40.94 in after-hours trading. Those March calls will likely double this morning if the gains hold.

There was also bullish call buying on Wednesday and Thursday of last week, and those investors are now looking at gains of at least 100 percent after the billboard news.

Total option volume was quadruple the daily average in CBS yesterday, with calls outnumbering puts by a bullish 7-to-1 ratio.

(A version of this post appeared on InsideOptions Pro yesterday.)
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