GPS – The Gap, Inc. – Bullish options investors purchased calls and sold puts on the retailer of clothing, accessories and personal care products today with shares of the underlying stock edging up 2.60% to $18.15 by 3:30 pm ET. Traders focused their attention on near-term August contract options, initiating bullish stances on the stock ahead of the retailer’s second-quarter earnings report, scheduled for release after market closes on August 19. August contract options expire the day after GPS reveals its performance for the second quarter of 2010. Optimistic individuals hoping to see shares rally higher ahead of expiration purchased 2,300 now in-the-money calls at the August $18 strike for an average premium of $0.69 each. Call buyers make money if the price of the underlying stock increases 2.98% to trade above the average breakeven point at $18.69 by expiration day. Other options players sold August $18 strike puts 1,600 times to take in an average premium of $0.54 a-pop. Investors selling the puts outright keep the full premium received on the transaction as long as GPS shares exceed $18.00 through expiration in August. Put sellers appear ready and willing to have shares put to them at an effective price of $17.46 each in the event the puts land in-the-money at expiration.