Apple Inc. (AAPL), company that designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications, is reporting earnings on Tuesday, July 26, after market close: (Source: TD Waterhouse)The company beat earnings estimates in 88% of time in the last eight quarters, underperforming in 12% of time, and has seen moderate volatility in the market price of its stock over the last three months: The market participants expect the following numbers over the next few quarters, including the upcoming one: (Source: TD Waterhouse)On the other hand, market data show that the August options are relatively cheap: (Source: TD Waterhouse)The monthly straddles (options with a strike price of $97.50) are worth around 5.2% of the current market price of the stock. Historically, the stock has been more volatile than that on a monthly basis over the last year: (Source: Google Finance. Calculations by author)As you can see, the stock has had a monthly standard deviation of 8.0% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 7.6% (calculated based on 19 business days remaining until expiration), also including volatility from the earnings event this week. I therefore see signs of moderate undervaluation in these options.What do you think of this trade?