Willbros Group, Inc. (WG) is a specialty energy infrastructure contractor serving the oil, gas, refining, petrochemical and power industries. The company's offerings include construction, maintenance and facilities development services. It is reporting earnings on Friday, July 29, after market close: (Source: TD Waterhouse)As evident from the above, the company beat earnings estimates in 25% of time in the last eight quarters, underperforming in 75% of time, and has seen substantial volatility in the market price of its stock over the last three months (mostly Brexit-related): 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 cheap: (Source: TD Waterhouse)The monthly straddles (options with a strike price of $2.50) are worth around 40.8% of the current market price of the stock. Historically, the stock has been a lot less 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 32.5% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 27.5% (calculated based on 15 business days remaining until expiration), also including volatility from the earnings event this week. I therefore see signs of clear overvaluation of these options.Investors can also be interested in buying out-of-money options to hedge the selling of straddles. On the one hand, this will limit expected returns. On the other hand, this action will minimize losses in the event the stock moves substantially over the next three weeks.What do you think of this trade?