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

Shares of Varian Medical Systems ( VAR) are moving higher along with strong options activity amid takeover rumors.

Varian is up some 5.7% to $33.19 in midday trading with heavy call volume. Average options turnover for Varian calls is an anemic 500 for a full session, but today more than 8,300 of the contracts changed hands in the first half hour of trading alone, according to OptionMonster's real-time tracking systems.

German technology conglomerate Siemens ( SI) is rumored to be the possible suitor because it has the cash and a plausible reason for such a merger, needing exposure in the cancer therapy market. Siemens is said to be working on a new oncology platform, and Varian could be a good fit as it trades at just half its 52-week high of $65.84. Two independent sources say Siemens' offer could be in the neighborhood of $45 per share.

The writer owns Varian stock and options.

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