The most common and most likely answer to this crossword clue is the 8 letter word FISHBOWL
I've seen this crossword clue in The Times
F
I
S
H
B
O
W
L
Buddy explains!
The straight part
We know that "watery home" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case watery home = fishbowl.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does FISHBOWL mean?
FISHBOWL noun- A small, rounded, transparent, and domestic aquarium.
- (by extension) Any place or event that lacks privacy or is intensely scrutinized.
- A variety of discussions where participants are organized in concentric circles and take turns where they and others in the same group are allowed to speak according to a set of rules.
- The central and smallest circle where the speakers are located in some versions of such a discussion.