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Large KEY Call Spread Targets Big Upside as Stock Surges 4.28%
KeyCorp (KEY) saw a high-volume options trade in the form of a 2,400-contract 20-25 call spread expiring January 15, 2027. With KEY stock jumping 4.28% to $20.22, this structured trade has quickly moved into profitable territory, showing how options traders are leaning into KEY's recent momentum.
Trade Snapshot: $206K Risk for $394K Potential Reward
| Expiration | Strikes | Contracts | VWAP Trade Price | Stock Price (Trade) |
|---|---|---|---|---|
| 15-Jan-27 | 20-25 Call Spread | 2,400 | 1.71 | 19.99 |
- VWAP Bid: 1.56
- VWAP Ask: 1.85
- Current Spread Price: 1.75 (+2.1%)
- Stock Reference Price at Trade: 19.99 ? Now: 20.22 (+0.23)
The buyers paid approximately $206,000 for the position (2,400 contracts × 100 × $1.71) and stand to gain about $394,000 if KEY finishes above $25 at expiration, a maximum return close to 90%. Already, with the spread price rising by 0.04 to 1.75, buyers have seen a paper gain of about 2.1%.
See more trade details in the multi-leg trade analyzer.
Recent Price Action and Breakout Over Resistance
KEY's stock is trading above its 52-week high and is up 4.28% on the day, breaking resistance at $19.71 and sitting at $20.22. Notably, the price is now:
- 11.6% above the 20-day moving average
- 12.8% above the 50-day moving average
- 17.5% above the 250-day moving average
All major moving averages confirm a strong uptrend. Compared to its longer-term performance, KEY is still underperforming SPY for the 1-year and 3-year horizons, but it's now outpacing the index over shorter timeframes. See table below:
| Duration | KEY Return | KEY Low | KEY High | SPY Return |
|---|---|---|---|---|
| Today | +4.4% | 19.49 | 20.25 | +0.1% |
| 2 Week | +14.3% | 17.99 | 20.25 | +2.3% |
| 1 Month | +13.1% | 16.91 | 20.25 | +2.0% |
| 3 Month | +6.8% | 16.47 | 20.25 | +5.7% |
| 6 Month | +26.5% | 15.59 | 20.25 | +14.8% |
| 1 Year | +11.6% | 12.73 | 20.25 | +13.8% |
| YTD | +22.9% | 12.73 | 20.25 | +17.6% |
| 3 Year | +32.1% | 8.54 | 20.30 | +77.9% |
| 5 Year | +51.9% | 8.54 | 27.17 | +93.6% |
Technical Trend Is Bullish Despite Longer-Term Underperformance
While KEY lagged behind SPY over the past year (+11.6% vs. +13.8%), the tables have turned recently. In the last 3 months and especially the past two weeks, KEY has returned +6.8% and +14.3%, beating SPY by more than double. With the current stock price exceeding the 52-week high and all moving averages pointing up, short-term momentum remains robust.
Investors looking at price momentum, breakouts, and recent leadership compared to SPY may see a technical picture that supports further upside moves, which fits with the logic behind this call spread bet.
Option Skew Remains Bearish—Contrarian Signals?
Interestingly, while the technicals lean bullish, Market Chameleon's proprietary option skew indicator shows only a 27% rank, signaling that 30-day implied volatility is skewed toward a bearish posture by recent standards. This suggests that, despite the price strength, the options market as a whole isn’t yet fully convinced of a continued rally—or could be bracing for mean reversion or risk events.
This divergence—bullish price action but bearish option skew—may set the stage for contrarian opportunity, or at least highlight how the current momentum isn't universally embraced by institutional options players.
Takeaway: Aggressive Positioning in a Recovering Name
The 2,400-contract 20-25 call spread in KEY highlights how some traders are seeking leveraged upside on the bank’s shares, even as volatility indicators flash caution. The trade will only achieve maximum profit if KEY climbs another 23.6% by January 2027 expiration, closing above $25. For those curious about other multi-leg strategies, you can check out the multi-leg option trade screener for more ideas.
Will this bold options wager pay off? With KEY’s short-term technicals firing and market skepticism visible in skew, the stock’s next move should offer valuable lessons for options traders on reading both the chart and the options tape.
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Disclosure: This article was generated with the assistance of AI