The options market is not expecting a wild ride for shares of Google Inc following the results from the Internet search giant on Thursday, but it is leaving investors vulnerable to surprises.

Google, typically known for volatile post-earnings share moves, tends to report a day before monthly options expiration. But this time it is reporting first-quarter results a week before the April 20 options contracts expire.

Wall Street has relatively muted expectations for Google's first-quarter results.

The earnings come at a time when Google shares have been somewhat range-bound, trading in a 100-point range between about $660 and $560 over the past six months.

That suggests a lack of commitment from both buyers and sellers, said Steve Place, a founder of options analytics firm investingwithoptions.com in Mobile, Alabama.

Expectations are for a 6.5 percent move in Google's stock price after its earnings, based on short-term options expiring by the end of this week as of Wednesday's close. That is below the average move of 8.2 percent over the past six quarters.

But the options market's track record on Google has not been great of late in estimating moves in the stock after earnings.

Over the past six earnings reports, the market has underestimated earnings volatility on four occasions and overestimated on two occasions, derivative strategists at Susquehanna Financial Group said in a March 14 report.

That is partly because Google is a high-priced stock, Susquehanna said

Over the past few quarters, Google options have routinely underpriced earnings volatility, which we believe is largely due to their elevated cost in absolute terms, said SFG, which is a market maker in the shares.

If anything, expectations are leaning to the optimistic side. Call buying has stood out in the Silicon Valley stock over the past two weeks.

Over the past 10 trading sessions. investors bought 1.78 calls to every put in Google on three U.S. options exchanges as new positions, according to Schaeffer's Investment Research. The ratio is higher than 86 percent of all readings taken over the past year.

This suggests there is a good deal of optimism on Google ahead of their upcoming earnings on Thursday night, said Ryan Detrick, senior strategist at Schaeffer's Investment Research. This sets the bar high, and any misstep in the earnings confessional could lead to disappointment.

Option volume in Google on Wednesday consisted of 67,000 calls and 39,000 puts, above its recent average daily turnover, according to options analytics firm Trade Alert.

Options flow does not appear to be meaningful in size. While it moderately favors near term upside, overall we judge positioning into the quarter to be generally neutral, said MKM derivatives strategist Jim Strugger.

Among the most popular options were the weekly $650, $635 calls as well as the $600, $635 puts, all expiring this Friday.

Traders have been looking at Google's weekly front-month $635 straddle price, which is near Wednesday's close of $635.96. The straddle, expiring this Friday, was priced at about $41.25.

A long straddle is a bet on volatility. The strategy involves a put and a call with the same strike price and expiration date and is often used to estimate the option market's view of the potential range of a stock's price going into earnings.

If a trader expects price action to be very similar to what had happened last quarter, then buying volatility through the weekly April $635 straddle is a very good bet, Place said.

Google stunned Wall Street in January with a rare miss of analysts' profit and revenue expectations, driving its stock down more than 9 percent. Prior to earnings, Place said the January straddle priced in about a 5.5 percent share price move.

So if an investor had purchased the weekly January straddle during last quarter's earnings, the one-day return would be more than 50 percent, Place said.

(Editing by Leslie Adler)

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