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How one bull is staying with KeyCorp

Mike Yamamoto (mike.yamamoto@optionmonster.com)

KeyCorp has reached its highest level since the beginning of the financial crisis in 2008, and one trader is positioning for further gains in the banking company.

optionMONSTER's Heat Seeker system shows that 1,179 August 11 calls were sold for $0.98 while 1,456 1,456 December 12 calls were bought for $0.73 on Friday. Volume was below the previous open interest in the August contracts but above it in the December options, indicating that an investor is rolling a long-call position to a higher strike price and increasing the size of the trade now that the stock has rallied.

The trader is closing the earlier calls to take some money off the table while using the rest of the proceeds to open a new position in the later-dated options. He or she is still looking for KEY to continue rising through the end of the year, but the December calls will expire worthless if the stock falls. (See our Education section)

KEY jumped 4.99 percent to $12 on Friday, its highest close since November 2008. Shares of the Cleveland-based lender have been gaining in recent months on the belief that regional banks will benefit from rising interest rates. First Horizon and Huntington Bancshares
also saw bullish option activity in Friday's session, as reported on InsideOptions Pro.

KeyCorp is scheduled to announce second-quarter results on July 18.

Total option volume in KEY topped 14,000 on Friday, more than 6 times its daily average for the last month. Overall calls outpaced puts by 3.5 to 1. 

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