KeyCorp has been fighting its way higher for three months, and
one investor is betting that it has more room to run.
optionMONSTER's Heat Seeker tracking program detected the purchase
of 10,000 June 10 calls for $0.50 and the sale of 10,000 June 8
puts for $0.25, resulting in a net cost of $0.25.
The resulting position will simulate owning 1 million shares in the
regional lender at a fraction of the cost, generating large profits
if KEY rallies above $10 and losing money below $8. It will expire
worthless if the shares close between those two levels on
KEY is up 2.43 percent to $9.26 in morning trading and has risen 24
percent since the beginning of December. The shares appear to be
finding support above previous resistance at $9 and have been
following their 50-day moving average higher (black line on chart
at right), which some traders may consider evidence of a bullish
Its last financial report on Jan. 25 crushed estimates, with
per-share earnings more than twice forecasts as loan losses
The bullish trade on KEY pushed total option volume in the name to
9 times greater than average, according to the Heat Seeker.
(Chart courtesy of tradeMONSTER)
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