Marvell Technology Inc.'s (MRVL) merger sparked gains on Thursday yielded substantial gains on options positions opened just three sessions earlier.

On Tuesday, Investitute's tracking systems detected the purchase of 4,200 August $20 calls in one print for $1.23 with shares at $19.92. This was clearly a new position, as open interest in the strike was only 806 contracts before the trade occurred.

These investors likely were betting that not only had the shares reached support, having bounced from the same level three times prior, but also that China's State Administration for Market Regulation would approve Marvell's merger with Cavium. The investors may have bought the $20 calls, expiring on August 17, to capture Marvell management's expectation that the merger would close mid-2018.

Those August $20 calls sold for $2.31 on Thursday, nearly twice their purchase price. The stock rose 9.5% in the same time frame, showing how quickly options can outpace gains in their underlying shares.

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.

Marvell Technology jumped 8.2% to $21.77 Thursday. The semiconductor and storage company rallied during the morning's trade after receiving approval from Chinese regulatory authorities for its proposed merger with Cavium.