Big earnings could drive Google shares to new high NEW YORK/CHICAGO (Reuters) - Investors' optimism for Google Inc (GOOG.O) is running high, setting the stage for another jump in its shares to an all-time peak after the Internet search company reports results Thursday. Options investors appear to be betting on more gains for the stock, which hit a record high of $670.25 on January 4. The stock has since pulled back by about 6 percent, closing at $632.91 on Wednesday. Traders have been purchasing Google calls, which grant the right to buy the stock at a fixed price up to a certain date, at a greater pace than its puts - or rights to sell the stock at a preset price - heading into earnings due after the market close on Thursday. The options market is positioned bullishly ahead of results. Call options have been bought over the past few weeks," Credit Suisse equity derivatives strategist Terry Wilson said. Investors have bought nearly two calls for every put option as a new position on three U.S. options exchanges over the past 10 sessions, according to Schaeffer's Investment Research, an Ohio-based options research firm. That call-to-put ratio of 1.93 is higher than 99 percent of the readings taken over the past year, suggesting bullish optimism heading into the results, said Joe Bell, senior equity analyst at Schaeffer's. Google, which almost always reports earnings a day before options expiration, is known for volatile post-earnings moves in its shares. The company has beaten earnings estimates 77 percent of the time since the second quarter of 2005, said Kevin Pleines, analyst at Birinyi Associates, in a report on Wednesday. After beating estimates, Google shares have opened higher 65 percent of the time, averaging a 4.1 percent gain the next morning, he said. But after missing estimates the stock opened lower 100 percent of the time for an average loss of 6.6 percent. Also on the day after results, from the open to the close, Google shares have traded lower 62 percent of the time, regardless of whether the results beat or miss, according Pleines. "This time traders are expecting slightly lower volatility as there appears to be greater confidence in the company's ability to deliver solid results," said Dan Nathan, founder of riskreversal.com, a New York-based firm specializing in options trade ideas. Google's fourth-quarter net revenue, which excludes fees shared with partner websites, is expected to jump 32 percent to $8.4 billion, according to Thomson Reuters I/B/E/S. But there are voices of caution, warning that any negative surprise could put heavy selling pressure on the stock. Google is a stock that is surrounded by a lot of optimism from Wall Street analysts and option speculators. This sets a high bar on the earnings report, and any disappointing news could leave the stock vulnerable to the downside," said Bell, of Schaeffer's. If the news is good, Bryan McCormick, an independent quantitative analyst at Deepfoo Analytics in Las Vegas, sees the first upside breakout for Google stock at $635.80, its 10-day moving average, which would put the stock back on the upside path it has been on since October. If the news is bad, the stock is likely to break below its 50-day moving average at around $618.38, triggering a potential bearish pattern that could send the stock down to the $575 area, McCormick said. In 9th paragraph corrects to show that the full-day change is for the day after results, not for the second trading day after the release of results Reporting By Angela Moon and Doris Frankel