Options traders are piling into calls on KEY at a two-month extreme. That bullish positioning sits in an unusual tension with a persistent selling campaign from KeyCorp's largest shareholder — Bank of Nova Scotia.
The put-call ratio has fallen to 0.77. That is 2.8 standard deviations below the 20-day mean of 0.86. The move has been consistent and directional: PCR stood at 0.89 three weeks ago and has dropped in nearly every session since. July 21 earnings are the obvious catalyst — call buyers appear to be positioning for an upside print.
Recent earnings history offers modest support. KEY moved +1.1% the day after Q1 results and +1.4% after the prior quarter's report.
The institutional picture tells a different story. Bank of Nova Scotia — still the largest holder with a 14.6% stake — has sold shares in five of the last six weeks. The trades are small relative to the total position but relentless. On June 23, Scotia sold 205,976 shares at $22.71. The week before: 277,182 shares at $22.13. The week before that: 355,338 shares at $21.24.
Scotia acquired its stake via a 2023 strategic investment. These weekly sales suggest an orderly wind-down of that position rather than a distressed exit. The significance scores on each trade are low. But the direction is unambiguous.
Street opinion has not shifted despite Scotia's trimming. Truist Securities raised its target to $24 on June 24. Stephens reinstated with Overweight and a $26 target just this month. The consensus sits near $25.22 against a current price of $23.41 — roughly 8% implied upside.
KeyCorp's analyst recommendation divergence ranks in the 96th percentile of the broader universe. That means consensus is tilting more bullish for KEY than almost any other stock in the database right now.
Short interest sits at 3.4% of free float — up 49% over the past month, but still a modest absolute level. The borrow market is wide open: availability stands above 7,400%, meaning shares to borrow are plentiful. This is not a squeeze setup.
What to watch: Whether Scotia's weekly selling pace accelerates into earnings, and whether the call-heavy options positioning holds as July 21 approaches.
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