Customer Reviews

Covered Call Writing with Qs and Diamonds: Double-Digit Returns on Ready-Made Portfolios

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4 star:		(1)
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1 star:		(1)

 

 

A friend of mine who took a college class about covered call writing taught by the author recommended this book. It was a real eye opener for me, as I hadn't had any exposure to covered calls before as is probably true of most people. I have enough assets to comfortably invest in the stock market, but not enough to diversify adequately through individual stocks. The discussion about the Nasdaq-100 Index Tracking Stock (QQQ) and the Diamonds-Dow Jones Average Tracking Stock (DIA)solved this problem for me. At a time when I have no confidence in mutual funds, I was able to use these two Exchange Traded Funds as the foundation for my investment portfolio. They ideally suit my risk profile. The ability to write covered calls on them was icing on the cake. I've written two sets of calls so far, so now I can appreciate the simple beauty of this investment strategy through firsthand experience. It worked out great. I also plan to study the chapter on technical analysis in more detail to help plan timing decisions in the future on whether to write out-of-the-money or in-the-money covered calls. Fortunately the book does an excellent job of making all of this completely intelligible for an investor at any level of understanding about the markets. The covered call feature creates an immediate stream of income and provides protection in case of a downturn in the market. I highly recommend this book for any investor who is looking for a better way to achieve investment goals rather than just owning mutual funds or stocks alone. Owning the Qs and Diamonds is a great way to participate in the stock market and get instant diversification through one or two securities. Also, the income from covered call writing is just what I needed to supplement my other income sources.

If you want to find out how to take 12% out of the market in cash per year, this book is for you. It's clear, concise and comes with instructions on how to create P/L templates on Excel. In addition, they'll send everything you need to get started on Excel in your email for free. The book set-up moves from simple on to complicated, lots of graphs and plenty of examples. My problem, which may be not a problem for others, is that pesky 12& gain per year. If you've got plenty of investible capital, that might be enough. But, if you don't, it isn't. For me, an annual return of 12% just isn't enough when you figure in your time and trading fees and the fact that you're essentially selling covered calls on the underlying Qs and Diamonds. On the other hand, Kadavy states up front that this is a 'conservative' approach to using options. The best thing about this approach is that you no longer have to chose from the confusing universe of optionable securities, all you use here are QQQQ and DIA. Simple and conservative.

This book is fine for the "housewife," or "elementary teacher," or a "journalist or liberal arts graduate" who wants an elementary introduction into covered calls... and then only if... they have no finance, or financial analysis knowledge. But... if you've got that type of education and experience... take a pass.

Any "B School" graduate could have written this book. The author fails to provide any real insight into the practical stratigies at the bottom of a market cycle, or specific "how to" guidance. Obviously, selling covered calls at the bottom of a market cycle, will yield very disappointing results. This is a strategy that's fine for the top of a market, or sideways market - but for the bottom of a market cycle, you're going to want to be on the buy side of the calls, or you're going to miss the big gains.

Nor, does he provide any insight into "how to read the market trends" (technical analysis) to alert you as to what type of market you're in, or about to experience, which should guide your strategy.

A more cycnical reviewer would suggest... the guy's a charlatan.

But... hey... that's just me... I'm just sayin...

A primer on options, having little to do with Qs, Diamonds, other than that is the vehicle. Not sure you need to buy book to see benefit of diversification in underlying asset -all other risk aspects remain the same.

If you know nothing about coverd calls, this book has a lot of info and is useful. However, if you already have an average knowledge of covered call writing I don't think you will find anything new in here. Bonus: it provides excel spreadsheets to track how well a trade might go.

I am an experienced investor that initially was somewhat intimidated by the world of covered call writing. But this book made the concept easy to understand and the application easy to follow, as well as quite profitable! Kadavy's approach is conservative, and well reasoned. I especially appreciate the spreadsheets that are provided. After reading this book I also ordered "Covered Call Writing With Exchange Traded Funds (ETFs)", and "Put Option Writing Demystified," which were also very good.

It was a my husband's favorite Christmas present. This is his favorite strategy - he has really been enjoying the book. He says all you need is a minimum of one thing you didn't know to catapult you farther - this had many more than one! Thanks.