New Insights on Covered Call Writing: The Powerful Technique That Enhances Return and Lowers Risk in Stock Investing

Rating:
Summary: Good, but not much new...
Review: This book, despite the title, does not really bring any new insights into the science (art?) of covered call writing. This material has been discussed in many different publications in many different forms. Primarily, the book is concerned with test data that aims to prove that a portfolio with long stock/short calls will outperform a long-only portfolio over time. The actual mechanics of how to do this are missing. Regardless, the data is interesting, and the discussion is useful, especially if you are a novice option trader.

Rating:
Summary: Good book but lacks the "how to"
Review: This is a good book if you already have a grasp of the basic concepts of covered call writing but are more interested in the details of why covered call writing works rather than how to use the concept to make money. The author spends a lot of time going through esoteric details on black scholes models and comparisons between the buy and hold and covered call strategy but little time is spent on providing real market examples on how to use the concepts in the book to make money. As an investor and trader my main purpose of reading any book is to learn the "how to" practical concepts that work in real market situations to enhance my profits and this is where this book is deficient. Furthermore this book does not get into the art of picking the right stocks and the timing criteria needed to decide when a covered call is a good strategy and when it is a losing one.
This book deserves at least 4 stars for explaining the covered call concept in great details and proving its usefulness. To make the best use of this book you need to couple it with one that will give more practical examples on using these concepts in real life situations in addition to strategies of picking the right stocks to write covered calls on and critical timing strategies. The book that worked best for me was the recently published September 2003 Second Edition "generate thousands on your stocks without selling them " By Elias. Elias's book has extensive real market examples with many innovative and profitable concepts.

Rating:
Summary: Good book but lacks the "how to"
Review: This is a good book if you already have a grasp of the basic concepts of covered call writing but are more interested in the details of why covered call writing works rather than how to use the concept to make money. The author spends a lot of time going through esoteric details on black scholes models and comparisons between the buy and hold and covered call strategy but little time is spent on providing real market examples on how to use the concepts in the book to make money. As an investor and trader my main purpose of reading any book is to learn the "how to" practical concepts that work in real market situations to enhance my profits and this is where this book is deficient. Furthermore this book does not get into the art of picking the right stocks and the timing criteria needed to decide when a covered call is a good strategy and when it is a losing one.
This book deserves at least 4 stars for explaining the covered call concept in great details and proving its usefulness. To make the best use of this book you need to couple it with one that will give more practical examples on using these concepts in real life situations in addition to strategies of picking the right stocks to write covered calls on and critical timing strategies. The book that worked best for me was the recently published September 2003 Second Edition "generate thousands on your stocks without selling them " By Elias. Elias's book has extensive real market examples with many innovative and profitable concepts.

Rating:
Summary: NOT YOUR FIRST BOOK ON COVERED WRITING
Review: This is probably not the first book you want to buy if you are like most stock investors who are trying to grasp covered writing and get started for yourself. It was written by a good technician, not a great teacher. I have no doubt that everything said in this book is accurate, but much of the information presented is on the fringe of what is necessary for most covered writers to learn how to get the job done. For me, a more simplified, step-by-step discussion on "how" would have helped with less discussion on "why." For those who want it, the technical aspects are done in great detail (e.g., 1. much discussion about Black Scholes valuation formula, 2. an enormous amount of space devoted to going back in history to demonstrate that covered writing can match returns of simple buy-and-hold stock ownership. Why spend time and space on this when knowledgeable investors are saying that stock performance in the next decades won't be anything like the past ones?). There are sections devoted to subjects that don't have anything to do with covered writing, but unfortunately less than one page was given to covered writing on Exchange Traded Funds and hot items like the QQQ. For me at least, I thought that the implementation section was the least useful part of the book. This book might help if you are interested in some of the more complex and esoteric aspects.