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Bulls are chasing Nam Tai Electronics

David Russell (david.russell@optionmonster.com)

The bulls are chasing the heat in Nam Tai Electronics.

optionMONSTER's market scanners detected a surge of call buying in the little-known Chinese company, which gapped higher at the open and is current up 28 percent to $13.68 in morning trading.

Activity focused on the November 15s, with some 1,500 trading against open interest of just 11 contracts. They initially priced for $0.20, but premiums then rose as high as $0.45 as the stock continued to climb.

Owning those calls locks in the price where investors can buy shares in the Shenzhen-based supplier of telecom equipment. They will provide nice leverage if the stock pushes above $15 by the end of next week, but also expire worthless if the gains stall. (See our Education section)

NTE's rally today comes after the company reported net-income growth of more than 2,000 percent in the third quarter as revenue more than doubled. There were no consensus estimates before the numbers came out.

Overall option volume was 10 times greater than average, with calls outnumbering puts by 11 to 1, according to our tracking systems.

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