Regional bank KeyCorp (KEY) is up 47% over the past year, soaring higher following the bank failures in early 2023. One trader sees shares continuing higher in the weeks ahead.
That’s based on the July 26 $15 calls. With 24 days until expiration, 6,014 contracts traded compared to a prior open interest of 173, for a 35-fold rise in volume on the trade. The buyer of the calls paid $0.17 to make the bullish bet.
KeyCorp shares last traded just over $14, meaning shares would need to rise about $1.00, or about 7%, for the option to move in-the-money.
Keycorp has been trading in a range since hitting a 52-week high of $15.86 in late March, and is now trending to the higher end of that range.
While the bank’s shares have performed well, earnings are down 30% over the past year, and revenues are off nearly 10%.
Plus, the bank now trades at a premium to its book value, or the rough value of its outstanding book of loans.
Action to take: Short-term traders may like shares as they’re heading to the higher end of their range, and could see a rally up to 10% in the next few months.
For traders, the July 26 $15 calls play to this short-term uptrend perfectly, and can likely see high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.