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NEW YORK/CHICAGO (Reuters) – RadioShack Corp (RSH.N) shares rose as much as 8 percent and its option volume surged on Wednesday on speculation that the electronics chain might be a takeover target, analysts said.

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The speculation also prompted bullish investors to aggressively pick up RadioShack call options, which grant them the right to buy the company’s shares at a fixed price by a certain date.

RadioShack’s overall option volume was seven times greater than its recent average daily volume with about 33,000 calls and 3,067 puts traded by midday, according to option analytics firm Trade Alert.

“The speculation is that one or more hedge funds might buy out the electronics retailer,” said Frederic Ruffy, an options strategist at Web information site WhatsTrading.com.

RadioShack said its policy was not to comment on market rumors.

BB&T Capital Markets analyst Anthony Chukumba downplayed RadioShack’s takeover chances.

“Aside from their wireless business, the rest of their business is in secular decline and thus I don’t think will be terribly attractive to a private equity firm,” Chukumba said.

RadioShack shares have nearly tripled over the last year as it repositioned itself as a hub for mobile phones and related services. The company saw strong sales of mobile phones and related equipment in the fourth quarter, but demand was weak for TV converter boxes, video game systems and batteries.

Chukumba added that the company was also facing a lot of competition in the wireless business from the likes of larger rival Best Buy (BBY.N).

WhatsTrading.com’s Ruffy noted as the stock rallied, heavy trading occurred in the March and April call options, allowing investors to buy RadioShack shares at $20 and $22.50 a piece.

“It appears that option investors are taking positions in anticipation of additional gains in the share price,” Ruffy said.

Its shares were up $1.05 at $20.92 in early afternoon trading. They had touched a high of $21.49 earlier in the session.

(Reporting by Dhanya Skariachan and Doris Frankel; editing by Gunna Dickson)