Some lucky options players appeared to have placed well-timed bullish bets in biotechnology company Pharmasset Inc's calls before Gilead Sciences unveiled an $11 billion takeover bid on Monday.

Gilead Sciences Inc , the world's largest maker of HIV drugs, will pay $137 per share for each Pharmasset share, a generous 89 percent premium to Pharmasset's Friday closing price of $72.67.

The surge in Pharmasset shares of nearly 85 percent to $134.17 in afternoon trade, created an opportunity for some options traders to reap a tidy windfall by taking profits off the table on call positions initiated this month.

As most investors probably don't anticipate a higher bid to come in, some are using the surge in the share price to book massive profits, said William Lefkowitz, options strategist at brokerage vFinance Investments in New York.

Several options participants said the well-timed trades in

selected Pharmasset calls were not necessarily indicative of insider trading because they could reflect speculative bets.

JUST A COINCIDENCE?

But one trader said a call trade initiated just last week was too much of a coincidence at best and should draw the eyes of U.S. securities regulators.

Traders often turn to calls hoping to profit on the rise of a stock's price. Notable was the interest in Pharmasset option contracts, allowing investors to pay $80 apiece for the shares by December 16 expiration heading into the buyout news.

On November 16, data from Web site optionMonster showed the purchase of 358 December $80 Pharmasset calls for $1.55 per contract for a total premium of $55,490, said optionMonster co-founder Jon Najarian. On that day, the stock closed at $71.77. Early on Monday, those calls cost $55 per contract, making the position worth about $1.9 million, he said.

This is extremely fortunate timing. Given that the value of these options moved up more than 3,300 percent, I think this trade may merit closer inspection by the regulators, Najarian said.

A spokesman for the U.S. Securities and Exchange Commission, which looks into unusual stock and options trading, declined to comment.

In addition, Pharmasset call volume was heavy on November 8 when 2,143 contracts changed hands, four times the average daily level, data from Trade Alert showed. Shares closed at $69.07 on that day.

The options on the anti-viral drug maker's stock at that time averaged 565 calls and 582 puts per day. But the direction of those trades was not easily determined, said Trade Alert President Henry Schwartz.

The volume consisted of a block of 495 December $80 calls that traded for $1.95 per contract and it was not clear if those calls were initiated by a buyer or a seller, he said.

The circumstances surrounding that call activity may have been tied to a presentation by Pharmasset at the Credit Suisse First Boston conference the next day.

The announcement of a deal also fed a surge of options trading in Pharmasset as about 8,255 puts and 3,375 calls changed hands late on Monday, a combined volume that was 8.8 times its average daily level, Trade Alert data showed.

(Reporting by Doris Frankel; Editing by Jan Paschal)