Amgen Inc. (AMGN), a biotechnology company that discovers, develops, manufactures and delivers various human therapeutics, is reporting earnings on Wednesday, July 27, after market close: (Source: TD Waterhouse)The company beat earnings estimates in 100% of time in the last eight quarters and has seen moderate volatility in the market price of its stock over the last three months: $AMGN, Amgen Inc. / 60 The market participants expect the following numbers over the next few quarters, including the upcoming one: (Source: TD Waterhouse)Note the wide deviation of expected financial results.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 $167.50) are worth around 4.6% 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 8.2% 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 18 business days remaining until expiration), also including volatility from the earnings event this week. I therefore see signs of modest undervaluation in these options.What do you think of this trade?