Traders grab Google options before expiration

CHICAGO, April 18 (Reuters) - Option players were furiously trading Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz) options on Friday, the final day of the April option contract, with some hoping to turn a quick profit on the fast intraday moves of its front-month premiums.

Shares of Google rose 20 percent to close at $539.41 on Friday after the Internet search company's strong earnings the previous day calmed fears of an online advertising slump.

Google option premiums are typically expensive but on this expiration day, when April options went off the board at the close, the speculative appeal for those options was enhanced because there was very little time value left.

"Google earnings on Thursday also surprised the market, resulting in a share jump that was not priced into the options, said Rebbeca Engmann Darst, equity options analyst at Interactive Brokers Group in Greenwich, Connecticut.

Google reported a better-than-expected first-quarter profit and revenue growth of 42 percent, and said its clients' spending had not been hurt by economic concerns.

"As Google takes its victory lap, option traders were very reactive," Darst said. "Last night's bombshell earnings numbers gave the market a chance to preen today."

The options of the Silicon Valley company were among the most active names in the U.S. options market.

In all, roughly 312,000 calls and 196,000 puts traded in Google, five times the normal level, according to option analytics firm Trade Alert.

"Our phones were ringing off the hook in the morning before the open," said Brian Overby, senior options analyst at online brokerage TradeKing in Boca Raton, Florida.