As a trader you are always looking for the most significant potential for a price move at any given time, and at the moment the situation in Cyprus means that this potential for volatility can be found in the EUR/JPY (given that it is a much less liquid pair when compared to the EUR/USD). Obviously, I am not interested in getting into a position before the necessary information is made public, so I will be watching for a downside EUR/JPY break at 121.70 as a trigger for weekly PUT options
. To the upside, the level I am watching is 123.40 but I am much more interested in seeing a failure.
To balance risks, for stock trades I will be watching home builder Lennar Corp (LEN)
, which has twice beaten analyst earnings estimates and has recently broken multi-year resistance levels in the $43 area. I am using this break and the expected increase in home sales next week to enter into monthly CALLS in LEN at $43
, looking for a rise above $45.