TALK OF MERGER BOOSTS GTE SHARES, OPTIONS.

Byline: Dylan Ratigan and Dan Morrison Bloomberg Business News

Trading in shares and options of GTE Corp., the nation's biggest local phone company, soared amid speculation that the company could announce a merger or alliance in coming days.

GTE shares rose 1 to 43-3/4 in trading of 1.69 million shares, more than its three-month average daily volume of 1.47 million.

Options to buy GTE at 45 in December rose five-sixteenths to three-quarters, almost doubling the value of the contract as a result of the speculation.

Some traders said AT&T Corp. could be a possible partner or even a buyer.

``They are holding the idea of a merger with someone out there, and they have a tremendous footprint across the country to bring to the table,'' said Boyd Peterson, a telecommunications analyst at the Yankee Group in Boston.

GTE said it doesn't comment on rumors or speculation.

GTE, which has its California headquarters in Agoura Hills, shot ahead of rivals in March when it became the first large local phone company to enter the $70 billion U.S. long-distance industry.

Since then, it has been dwarfed by four megamergers worth a total of about $75 billion that promise to alter the telecommunications landscape.

Since March, Bell Atlantic Corp. said it will buy Nynex Corp.; SBC Communications Inc. said it will purchase Pacific Telesis Group; Worldcom Inc. shook hands with MFS Communications Co.; and British Telecommunications Plc said it plans to buy MCI Communications Corp. Analysts suggest GTE could be next.

GTE is having its annual meeting with Wall Street analysts in Norwalk, Conn. The meeting is scheduled to finish today.