"This is being attributed to a rumor that Priceline is interested in acquiring Travelzoo," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.

Jon Najarian, co-founder of Web information site optionmonster.com in Chicago, said the share rise was "on both takeover talk and a more optimistic outlook for the sector." "The takeover talk we're hearing is in the form of a Priceline for Travelzoo rumor that hedge funds have heard and have reacted to," he said.

He said investors are buying into the rumor because of the 45 percent gain in Priceline's share price since August.

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