The ongoing European debt crisis has been a wet blanket hampering global markets for many many months now. Though traders have a slew of European country exchange traded funds (ETFs) at their disposal, many have used the euro currency as the trading vehicle of choice for expressing bets on the endgame of this ongoing drama.

And don’t think that you have to have a forex account to be able to place trades on currencies. The ever-increasing stable of ETFs has grown to include many securities that track the major world currencies, like the U.S. dollar via PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP), the yen via CurrencyShares Japanese Yen Trust (NYSEARCA:FXY), the British pound via CurrencyShares British Pound Ster. Trst (NYSEARCA:FXB) and the euro via CurrencyShares Euro Trust (NYSEARCA:FXE).

Click to EnlargeNot surprisingly, global fears of a continued European meltdown have driven the FXE lower over the past three months. Price chart aside, the implied volatility of FXE options is also approaching an interesting zone. Over the past four years, euro implied volatility (EVZ, chart below) has never dropped below 9%. Moreover, anytime volatility has dropped to these levels, it has represented an alluring opportunity to buy options on the cheap.

Click to EnlargeRegardless of your outlook on FXE, the odds favor structuring option positions that are long volatility, not short. If you’re bullish, consider buying call options or call spreads over selling puts.

If bearish, consider buying put or put spreads over selling calls.

If you’re currently agnostic with respect to direction, but feel a large move is brewing, a long straddle or strangle play may be worth a shot.

At the time of this writing Tyler Craig had no positions on FXE.