Honeywell International Inc. (HON), a technology and manufacturing company operating in three segments: Aerospace, Automation and Control Solutions (ACS), and Performance Materials and Technologies (PMT), is reporting earnings today before the market opening: (Source: TD Waterhouse)The company beat earnings estimates in 87.5% of time on the last eight quarters (underperformed in 12.5% of time) and has shown swift movements in the market price of the stock: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 monthly straddles (options with a strike price of $120) are worth around 4.4% 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 6.1% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 6.0%, while it also includes volatility from the earnings event today. I therefore see signs of clear undervaluation in these options.What do you think of this trade?