Well-touted and large 115.00 barrier options will prove a tough nut to crack, so leaning against this level to benefit from existing defence could bring rewards if it holds. nL1N2RG0E2
Binary options might be worth considering as they only risk an upfront premium.
Those that pay a fixed amount if 115.00 holds aren't cheap however, with the premium being 38% of total payout for a one-month expiry, and 26% for two-month, although attaching a downside barrier will significantly reduce cost.
Consider a two-month expiry 115.00/110.00 Double-No-Touch (DNT) option.
Its premium is just 12.5% of total payout, so an 8:1 return if USD/JPY hasn't traded at 115.00, or at 110.00 before the Dec 20 expiry.
An additional advantage is that FX option implied volatility has risen to highs since March, making these options cheaper.
If 115.00 holds, however, implied volatility has room to ease, and lower implied volatility will increase the cost of binary options and the profit potential for those who wish to pare early.
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