UPS – United Parcel Service, Inc. – Shares of the provider of services in the package and freight delivery industry jumped 7.15% to an intraday high of $64.31 following the release of better-than-expected second-quarter earnings. The world’s largest package-delivery company earned $0.84 a share in the second quarter, which is greater than the consensus forecast of $0.75 a share, and also raised its full-year earnings estimate to a maximum of $3.45 a share from a previously reported maximum of $3.30 per share. Bulls anticipating continued upward movement in the price of the underlying shares through expiration day next month purchased roughly 2,100 calls at the August $65 strike for an average premium of $0.99 per contract. Investors long the calls make money if shares exceed the average breakeven price of $65.99 by August expiration. Medium-term optimists scooped up 1,700 calls at the October $67.5 strike for an average premium of $1.07 apiece. Shares of the package-deliverer must rally at least another 6.6% in order for call buyers at this strike to start to accrue profits above the average breakeven point of $68.57 by October expiration. Put action at the October $52.5 strike, where more than 6,000 contracts changed hands, appears to be the work of an investor taking profits off the table by buying-to-close a previously established short put stance. It looks like the trader originally sold 6,000 puts at the October $52.5 strike to receive premium of $1.28 per contract back on July 12, 2010, when UPS shares traded at an intraday high of $60.50. The subsequent surge in the value of the shares pushed premium on the puts significantly lower. Thus, it seems the put-seller bought back the contracts today at an average premium of $0.59 each. In this scenario, the trader walks away with net profits of $0.69 per contract. The overall reading of options implied volatility on the stock declined 16.7% to 23.40% following earnings.