Netflix (NDAQ:NFLX) shares added over 5% during yesterday's session after rumors surfaced that Amazon.com (NDAQ:AMZN) may be interested in acquiring the company. Traders active in the options market fueled speculation by purchasing Netflix call options and Amazon.com put options, hoping to gain from a leveraged spread.

Is there any merit to these rumors? Well, Several analysts immediately dispelled them while noting that similar rumors tend to surface ever six months or so. Analysts also question whether or not Amazon would even desire a presence in the online video rental business. After all, there is a growing trend towards the downloading of many videos which will eventually cut into Netflix's margins. Consequently, a merger between these two companies isn't too likely.

Meanwhile, many investors insist that Amazon's recent rise of more than 70% has provided it with increased buying power. In order to sustain this momentum, the online retailer may need to look into other markets. While some see Netflix as a competitor doomed to declining margins as Amazon's own downloading services increase, others maintain that the company could simply be purchasing the customer lists and temporary cash flows if nothing else.

Clearly Amazon is in need of an acquisition or other means to spend its new-found cash. Whether or not this will result in an acquisition of Netflix remains to be seen; however, given the substantial interest by active traders, it's definitely a stock worth watching!

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