Jon "DRJ" Najarian, co-founder of OptionMonster.

Options activity in Textron ( TXT) is crazy busy today as shares surge in heavy volume amid takeover rumors.

Shares of the aircraft maker bottomed at $4 or so in early March, but are up more than 9% to $8.11 in midday trading on merger and acquisition talk involving Raytheon ( RTN) and Lockheed Martin ( LMT). Textron is trading so far below its 52-week high of more than $65. Even with today's pop, buyout interest might make sense.

The options activity today is focused on the May 10 strike, where more than 19,000 calls traded in the first 30 minutes alone, nearly five times the average daily turnover of 4,200 contracts, according to OptionMonster's tracking systems. Does that sound like the institutional paper is taking this seriously?

The writer owns stock and options in Textron.

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