Walt Disney Co. (DIS) shares spiked to record highs Thursday, handing timely gains to bullish options traders.

On July 13, Investitute's tracking systems found that 3,200 Weekly $110 calls expiring on July 27 were bought from $1.07 to $1.85 with shares at $109.30. These were clearly new positions, as open interest in the strike was only 562 contracts before the trades occurred.

Bullish investors likely wanted to position themselves for a rally in DIS stock, with the pending acquisition of Twenty First Century Fox Inc. (FOXA) but wished to do so with limited downside risk. These weekly calls fit the bill and proved to be quite rewarding.

Those weekly 27 July $110 calls sold for $4.70 Thursday, July 19, more than 4 times their initial purchase price. The stock rose 4.73% in the same time frame, underscoring how quickly options can far outpace gains in their underlying shares.

Walt Disney reached an all-time high of $114.68 the morning of July 19 before pulling back to close at $112.13, up 1.3% on the session. The media and entertainment giant, which reports earnings on August 7, rallied after Comcast dropped out of the bidding war for Fox assets.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

Contributed by Investitute. TheStreet has an affiliate partnership with Investitute.