Strangle Sold on KeyCorp (KEY)

Shares of KeyCorp (KEY) are trading lower on the session by 1.47%, at $8.40. The stock has been consolidating between the $8.00 support level and the $9.00 resistance level for the past two months.

One trader is betting that the stock will continue to be range bound over the next few months. A short while ago the March 2013 $8/7 strangle was sold 12,015 times, near the bid, for $1.02. Given open interest on both strikes, 1,210 and 6,263 contracts respectively, this is clearly new positioning.

30-day implied volatility is down 1.4% today to 28.76%, while 10-day historical vol is registering 35.20%. At $1.02, the strangle was sold at roughly 33.5% vol.

KeyCorp is a bank holding company for KeyBank National Association. Through KeyBank and certain other subsidiaries, the company provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance and investment banking products and services.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.