Bullish Case: KeyCorp shows potential for recovery due to improved net interest income and positive sentiment from Scotiabank's investment, which could bolster investor confidence, driving the stock higher as market conditions stabilize.

Bearish Case: Lingering economic uncertainties, high implied volatility, and ongoing investigations present risks to KeyCorp, potentially leading to further price declines and investor hesitation amid market turbulence.

Potential Outcomes:

1. 35% chance of a bullish recovery as net interest income improves.

2. 45% chance of continued pressure from regulatory scrutiny and economic instability.

3. 20% chance of sideways trading due to mixed market signals.

Trading Oracle: Consider establishing a bearish strategy by selling near-term $16 put options while simultaneously buying $15 puts for protection. This approach leverages high implied volatility for profitability, aiming for strong risk-reward amidst uncertain market sentiments.

December 18, 2024