Micron Technology Inc attracted large options bets days ahead of reports that China’s state-backed Tsinghua Unigroup Ltd is preparing a $23 billion bid for the U.S. memory chip maker.

Micron’s shares jumped as much as 13 percent to $19.84 on Tuesday, on reports that the Chinese technology conglomerate is prepared to bid $21 per share for Micron. A Micron spokesman said it had not received an offer.

The sharp rally in the shares comes after a days-long slide in the stock after the company gave a dismal sales outlook in late June. The shares fell to a twenty-month low of $17.14 on July 9.

The stock’s options, however, have attracted bullish bets over the last two weeks – including calls betting the shares will rise above $19 by Aug. 21, said Fred Ruffy, options strategist at WhatsTrading.com.

Open interest in the August $19 calls has ballooned to nearly 100,000 contracts, from a bit more than 4,000 contracts on July 2, making it the biggest block of open interest in Micron’s near-term options.

While the trade appears to be aggressive, given that Micron’s options are usually quite heavily traded, they do not necessarily appear suspicious, strategists said.

“After the huge drop in the stock on earnings, many investors have been buying calls in anticipation of a rebound, not specifically expecting this deal,” said Pravit Chintawongvanich, derivatives strategist at Macro Risk Advisors in New York.

The large trades in the August options also appear to be tied to a trade in Micron shares.

“The buyer of those calls appears to have sold some stock simultaneously and probably took a bet on sustained high level of volatility,” said Anshul Agarwal, equity derivative strategist at Bay Crest Partners in New York.

If so, the trade might not have been betting on a big directional move in the shares, but simply banking on increased volatility.

Options activity has been known to spike before the public announcement of deals and the U.S. Securities and Exchange Commission has in the past announced enforcement action for alleged insider trading involving options trading.

The Financial Industry Regulatory Authority, which oversees securities firms, and the SEC declined to comment on Micron’s options activity.

(Reporting by Saqib Iqbal Ahmed; Editing by Bernard Orr)

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