Skyworks Solutions Inc. (SWKS) is reporting earnings on Thursday, July 21st, after-hours:(Source: TD Waterhouse)The stock has been quite volatile historically following earnings announcements. On the other hand, the options are priced quite cheaply relative to historical data:(Source: TD Waterhouse)The straddle (calls and puts with a strike price of $68.50) is worth around 7.7% of the current market price of the stock today. Keep in mind that there are four days until the options' expiration. Historically, the stock has shown the following mean and standard deviation figures:(Source: Google Finance. Calculations by author)A four-day straddle, according to this data, would have a standard deviation of 5.5%. This means the market is only giving a 2.2% premium to the current straddles, which I believe is too small. In addition, I think the options will keep on gaining in implied volatility as the earnings announcement is getting closer. There are a few things you can do in addition to buying the straddle:(1) You can partially finance the trade by selling a strangle (i.e. effectively doing a reverse iron condor), if you are not sure the stock will move swiftly the next day. After all, the theta decay is quite enormous for ATM options in the last days of their life:(Source: optionpit.com)(2) You don't have to hold the straddle through earnings, if you are afraid implied volatility will leave the market, crashing the options' value. To do that, make sure you sell the straddle prior to the market closing on July 21st.(3) In order to limit the loss associated with time decay, you can buy the straddle right before the market closing on July 21st. However, in this case, you are betting on the implied volatility staying at the current level. Otherwise, if the IV rockets, the options will gain in price (and very likely the gain from IV will cover the loss associated with the time decay).Historically, the company has beaten analyst estimates seven times over the last eight quarters. The analysts are expecting quarterly EPS of $1.21 per share. The market is yet again hoping that the company will beat estimates, as the investors have been boosting the share price over the last month: I expect the stock to move significantly the next day after the earning release, especially, if the company fails to meet expectations for the first time in the past two years.