NEW YORK (AP) _ The Chicago Board Options Exchange is investigating possible insider trading in FHP International Corp.'s stock options two days before the health maintenance organization announced it was being bought by a competitor.

The exchange called its action a ``routine inquiry,'' Wednesday and wouldn't elaborate. But one trader of the options said a drastic run-up in volume and price just before the deal was announced looks suspicious.

``They were buying because they knew it would be taken over _ or at least it seems that way,'' said Mike Affinito of the Option Resource Group.

FHP, a large California-based HMO, said Monday it had agreed to a $35-per share takeover by PacifiCare Health Systems Inc.

Last Thursday, the Chicago exchange's trading volume in FHP ``call options'' zoomed to 2,091 _ nearly 10 times its average for the previous two weeks.

An investor who buys a call option spends a relatively small amount of money for the right to purchase a stock at a specific price before a certain date. These investors are betting that the actual market price of the stock will rise above the price they agree to pay.

Affinito said there was heavy buying Thursday in options that gave investors the right to buy FHP for $25 or $30 a share for the next several weeks.

Monday's announcement sent shares of FHP's stock soaring $7.37 1/2 to $35.25 on the Nasdaq Stock Market. Options holders who bought the stock for well below market value just before the announcement could have sold it immediately for a quick and healthy profit.

In addition to options, demand for FHP shares also rose sharply Thursday. That day, FHP shares rose $1.37 1/2 to $27.50 on volume of 1.09 million shares _ more than double the recent average volume.

The National Association of Securities Dealers, an industry watchdog group that has the power to examine regular stock trading, never discusses what it is investigating, NASD spokesman Stephan Beauchesne said Wednesday.

Beauchesne added, however, that it is NASD policy examine any abnormal spikes in price or volume.

``We look into it to see who's doing the trading and start a low-level investigation, then if we feel there's something there, we go deeper,'' he said.

The NASD has the power to discipline its securities brokers, but not corporate insiders. If it suspects someone bought or sold their stock illegally based on inside information, it passes the information onto the Securities and Exchange Commission, which has greater powers.

Ria Marie Carlson, a spokeswoman for FHP said Wednesday her company hasn't been contacted by any investigators and she had no concrete information about what happened.

``I can tell you there were a lot of people outside the walls of FHP who were involved in the deal,'' she said, referring to investment bankers and lawyers who advised FHP and PacifiCare.

``I don't know if this was an insider at FHP or other insiders to the deal who were outside FHP.''