$DIS call prices surge fourfold

Walt Disney spiked to record highs today, handing huge gains to bullish option traders.

On July 13, Investitute’s tracking systems found that 3,200 Weekly $110 calls expiring on July 27 were bought for $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.

Those calls sold for $4.70 today, 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.

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.

DIS reached an all-time high of $114.68 this morning before pulling back to close at $112.13, up 1.3% on the session. The media and entertainment giant, which will report earnings on Aug. 7, rallied after Comcast dropped out of the bidding war for Fox assets early today.