Options activity on Google Inc suggests about a 4 percent move in the stock with a moderate upside bias following the Internet giant's earnings report due after the bell on Thursday.

The July $500 calls were the most actively traded options for Google on Wednesday with 6,500 contracts, indicating that investors are betting on the stock to rise to $500 by July options expiration on Friday. About 6,200 lots traded for the July $490 calls.

Google shares closed up 0.4 percent at $491.34 on Wednesday.

The calls are definitely more active and the bias is definitely to the upside, said Caitlin Duffy, options strategist at Interactive Brokers Group.

The biggest open interest was also in the July $500 calls with 10,700 contracts, Duffy said.

As of Wednesday's close, the call-to-put ratio stood at 1.49.

The most actively traded put options were the July $480 and $490 strike prices, but with only about half the volume of calls.

Both calls and puts traded with an implied volatility of 65 percent, suggesting a 4 to 4.5 percent move in the stock after earnings, said Jared Levy, senior derivatives specialist at

PEAK 6.

Since Google options have only one trading day left after earnings before expiration, the implied volatility is all earnings play, said Levy.

This would be a relatively small move compared with previous post-earnings moves for Google, he said, suggesting that investors might be expecting an in-line earnings report.

Google is known for high volatility around earnings, especially as the company tends to report results a day ahead of options expiration.

Google's shares have been beaten down recently amid concerns about competition with Apple and fallout from investigations into the company's collection of personal data via wireless networks.

The stock is currently 28.1 percent off its year high of $629.51 reached on Jan 4.

Google is expected to report earnings of $6.54 per share on sales of $45 billion, according to Thomson Reuters I/B/E/S. In the 2009 second quarter, Google earned $4.66 per share on revenue of $5.52 billion.

(Reporting by Angela Moon, Editing by Leslie Adler)

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