Turning to the calls side of the option chain, the call contract at the $120.00 strike price has a current bid of $6.80. If an investor was to purchase shares of KSU stock at the current price level of $116.14/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $120.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 9.18% if the stock gets called away at the June 2014 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if KSU shares really soar, which is why looking at the trailing twelve month trading history for Kansas City Southern, as well as studying the business fundamentals becomes important. Below is a chart showing KSU's trailing twelve month trading history, with the $120.00 strike highlighted in red:
Interesting KSU Put And Call Options For June 2014
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