Biogen Inc. (BIIB), a biopharmaceutical company operating in discovering, developing, manufacturing and delivering therapies to patients for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders segment, is reporting earnings tomorrow:(Source: TD Waterhouse)The company beat earnings estimates in 88% of time on the last eight quarters (and under the rest) and has shown swift movements in the market price of the stock: $BIIB, Biogen Inc. / 60 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 short-term options are relatively cheap:(Source: TD Waterhouse)The straddles (options with a strike price of $262.50) are worth around 7% 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 weekly standard deviation of 5.95% over the last 52 weeks, while the straddle expiring in a bit more than a week has an implied monthly volatility of around 7.16%, while it also includes volatility from the earnings event tomorrow. I therefore see signs of clear undervaluation in these options. What do you think of this trade?