Covered Call Writing With Exchange Traded Funds (ETFs): Double-Digit Returns, Diversification, Downside Protection

"COVERED CALL WRITING WITH EXCHANGE TRADED FUNDS (ETFs)" is a tutorial investment program designed for investors who utilize Exchange Traded Funds (ETFs) and who desire to learn about and implement a covered call writing strategy to achieve conservative double-digit returns. It is primarily for investors who have some knowledge of stock market and Exchange Traded Fund investing but are new to covered call writing. As a companion book to "COVERED CALL WRITING DEMYSTIFIED" for ETF investors, it simplifies, fully explains, and instructs investors on how to use covered call option writing on ETFs. The program outlined in the book offers perhaps the single best opportunity to achieve double-digit investment returns in the slow growth or no growth stock market expected by many experts in the future. This strategy works best in such a market environment. The investment approach of writing covered call options, a more conservative investment strategy than just owning ETFs alone,! has been available for decades. Until now, however, it has often been unknown or misunderstood by many investors, especially its use in conjunction with ETFs.

Why is "COVERED CALL WRITING WITH EXCHANGE TRADED FUNDS (ETFs)" needed? Many nationally recognized investment experts believe that the U.S. stock market in the future will most certainly produce significantly lower returns than the high returns of the past for many years to come. Some noteworthy examples:

* "The long-term prospects for equities in general is far from exciting." - Warren E. Buffett, The Chairman’s Letter, Berkshire Hathaway, Inc. 2000 Annual Report, Page 3

* "Over the next century you should expect your share prices to average 6% (return) a year. Over the next five years, ten years, I think you’ll be lucky to come out even on share prices." - Sir John Templeton, pioneer in the mutual fund industry, Business Center, CNBC TV Interview; October 1, 2001

* "The Dow has gone absolutely nowhere for three, coming on four years now. I think this will last maybe for another ten years." - John Bollinger, noted technical analyst and creator of the "Bollinger Bands," CNBC TV Interview; October 29, 2001

"COVERED CALL WRITING WITH EXCHANGE TRADED FUNDS (ETFs)" is unique because:

(1) A list by category of all Exchange Traded Funds is provided, specifically indicating those ETFs that offer covered call writing. Each ETF on which covered call writing is available is ranked according to the extent of call option writing choices available and the volume of option trading to assist investors with selection of the best alternatives for covered call writing. Other information about each ETF is also provided.

(2) A detailed investment program is outlined for personal implementation to assist investors in achieving consistent double-digit returns utilizing covered call writing on Exchange Traded Funds. This investment strategy is most effective in a slow growth or no growth stock market, the kind of market projected in the future by so many investment experts.

(3) The entire subject matter is centered on a focused area of standardized options...covered call writing on ETFs an investor owns or acquires in the future.

(4) A complete education on the subject is provided.

(5) Unlike other books about options, it is easy to understand by any investor.

(6) Easy-to-use Microsoft® Excel templates for PC use as well as manual worksheets are provided to assist in making specific investment decisions regarding which covered calls to write on ETFs, to effectively track results, and for other planning purposes.

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All Customer Reviews
Average Customer Review:
0 of 1 people found the following review helpful:

Too light to be worth reading, 2008-06-22
If you are new to investing, this book might be worth reading.

This book needs to spend more time focusing on strategies, the justification for those strategies and analyzing hypothetical examples of those strategies so the content actually aligns with the title.

The majority of this book is "what are ETFs and how can the help you." If you know the answer to that question already, or are willing to google it, then you time is better served finding another book on strategy.


3 of 4 people found the following review helpful:

Useful For Those New to Call Writing, 2006-12-10
As noted in the other reviews, this book is for investors who are new to covered call writing. The text is an easy read - I finished the book in two hours. If you have any experience at all with writing covered calls, it is my opinion that you will not learn anything new from this book.


7 of 12 people found the following review helpful:

A fundamental contradiction, 2006-12-09
I bought this book as an investor heavily involved in ETFs/Index funds that broadly cover the US and Global markets. I was investing for long-term growth and bought this book hoping to increase my returns using covered call writing. So far, this is on par with what this book is about.

BUT, as I read through the methods put forth, there was a slow and subtle shift in perspective/ideology that in fact subverts the whole foundation of the goals of ETF/Index funds. No longer are we building upon the foundation of broadly-based ETFs for long-term growth, we are now looking for ETFs that are compatible with the Covered Call Writing strategy, ETFs that I discovered had very different characteristcs and met different criteria altogether. "IVV", for example, does not fit the Covered Call Writing model very well. But the premise of the book was to use one's established ETF portfolio and enhance it, not reject our whole basic strategy and go fortune hunting.

So, I ask the question for this strategy, why use ETFs at all? Because we can use our existing ETF portfolio/strategy? But if we implement the proposed Covered Call Writing strategy then we would have to gradually abandon our initial ETF strategy. So if we're interested in options, we should just go back to the basics of options and build a different strategy based on those fundamentals.

The book was easy to read and not very expensive so I don't regret buying it. It did make me think a bit.


1 of 6 people found the following review helpful:

Covered Call Writing with Exchange Traded Funds, 2006-11-09
This most basic document is tied with new vehicle to benefit from that exposure, offering little in way of what strategies lend themselves to that vehicle. A better title would have been "How Options Work". It relates to ETFs, DIA, or agricultural or metals options equally in its weak connection.


9 of 10 people found the following review helpful:

Excellent intro to Writing CC's, 2006-05-09
Very good book for people new to writing covered calls. I learned alot from the book and have put the theory into practice by writing several CC's. Unfortunately I have not found many good CC opportunities around ETFs, most have been in the 1.5-2% range one to two months out. On the other hand I found many exceptionally good opportunties on regular stocks. My only major problems so far (and it's a good one to have) is that in 4/5 cases, the stocks for which I wrote CC's have gone well beyond the strike prices. In response I have "rolled up" a few CC's to take advantage of the increased capital appreciation opportunity. This has worked fairly well but is far more complex than just letting the CC ride until expiration. My only suggestions to improve this book would be to add a section on guidelines for rolling up and down in response to stock price swings, and maybe something on writing ITM CC's instead of just OTM calls. Overall an excellent and concise book, certainly one of the most immediately useful and practical investment books that I own. Very nice job.

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