OptionS traders bagged exponential gains on Supervalu Inc.'s (SVU) buyout news on Thursday, July 26.

On May 29, Investitute's proprietary programs identified the purchase of 3,300 October $18 calls, expiring on October 19, for $2.55 to $2.95 with shares at $18.24. Open interest in the strike was only 70 contracts before the trades occurred, showing that this was fresh buying.

The options traders may have expected SVU shares to appreciate throughout the back half of the 2018 calendar and wished to participate in the grocer's run with an outlined risk profile.

Those calls ended up selling for $14.25 Thursday, about five times their purchase prices, and only two months after they were acquired. The stock soared 76.64% in the same period, a huge move but nowhere near that of its options.

Supervalu rocketed 65.4% to $32.17 on July 26. That morning, United Natural Foods announced that it was acquiring the grocery chain for $2.9 billion.

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.