Tableau Software, Inc. (DATA) offers software products. The company's technologies include visual query language (VizQL), a visual query language that translates drag-and-drop actions into data queries and then expresses the information visually, and Hybrid Data Architecture, which combines the Company's Live Query and In-Memory Data Engines technologies. It is reporting earnings on Tuesday, August 2, at market close:(Source: TD Waterhouse)As evident from the above, the company beat earnings estimates in 100% of time in the last eight quarters and has seen substantial volatility in the market price of its stock over the last three months: $DATA, Tableau Software, 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 August options are relatively inexpensive:(Source: TD Waterhouse)The monthly straddles (options with a strike price of $56.50) are worth around 14.2% of the current market price of the stock. Historically, the stock has as volatile as than 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 14.3% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 11.6% (calculated based on 14 business days remaining until expiration), also including volatility from the earnings event this week. I therefore see signs of modest overvaluation in these options. Hence, selling the straddle is a good idea from the theoretical standpoint.Investors can also be interested in buying out-of-money options to hedge the unwanted upward exposure:(Source: optionsprofitcalculator.com)On the one hand, this will limit expected returns. On the other hand, this action will minimize losses in the event the stock moves swiftly over the next three weeks. The risk-return profile of this trade looks like this:(Source: optionsprofitcalculator.com)What do you think of this trade?