WAG – Walgreen Company – Shares of the largest U.S. drugstore chain rallied as much as 11.3% today to touch an intraday high of $33.78 following the release of better-than-expected fourth-quarter earnings. Walgreen’s said it earned $0.49 a share in the quarter on revenue of $16.87 billion, which beat average analyst forecasts of $0.44 a share in net income on revenue of $16.84 billion. One options strategist was properly positioned to benefit from bullish movement in Walgreen’s shares today. It looks like the investor sold approximately 35,000 puts at the October $27 strike for an average premium of $0.17 apiece back on September 20, 2010, when WAG’s shares were trading around $29.25. Premium on those put options collapsed with the jump in shares, allowing the investor to buy back the short position at just $0.04 in premium per contract. Net profits on the transaction amount to approximately $0.13 per contract or $455,000. Next, the investor extended bullish sentiment on the stock by rolling the short stance in some 35,000 puts up to the higher October $31 strike for which he received premium of $0.14 each. The trader keeps the full premium pocketed on the fresh sale of put options at the October $31 strike as long as WAG’s shares exceed $31.00 through expiration day next month. The overall reading of options implied volatility on Walgreen Co. fell 13.5% to 24.74% following earnings. Options traders exchange more than 124,400 contracts on the stock by 12:20 pm ET.