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Allen Sama is the owner, head trader, and trading coach at OptionGenius, who specializes in high probability trading.  He got his start after getting laid-off, and then he had to get serious after he lost $40k of his newlywed wife’s savings!  He promised that he would learn to become profitable in 3 months or he would go back into the workforce.  He’s been trading ever since!  In this episode of How To Trade It, Allen shares how he mixes stocks and options together to maximize his profits. You don’t want to miss it!
@OptionGenius can show you how to create passive income by only trading 15-60 minutes each month. Listen to this episode of How To Trade It to hear more! #stocks #options #passivetrading #coveredcalls #nakedputs #creditspreads Click To Tweet

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You’ll want to hear this episode if you are interested in…

  • [01:48] Allen’s take on using stocks & options to create passive income
  • [04:12] Covered calls with a twist
  • [06:20] How Allen selects his stock companies
  • [08:20] Credit spread trading 
  • [12:55] Increasing your ROI
  • [22:17] The Warren Buffet approach
  • [25:40] Learning how to make thousands monthly
  • [33:02] When it’s time to dump that stock
  • [37:15] Dreams of Mt. Kilimanjaro
  • [43:27] Getting more information about Passive Trading

Creating Passive Income

Allen looks for high-quality, long-term companies which offer dividends to purchase stocks from, and then he sells options on them to boost his return.  The secret to creating passive income isn’t about hitting “home runs”, but rather is about learning to consistently make base hits, over and over again.  This style of trading works well for Allen’s temperament, since he wants to keep his stress level as low as possible.  The best part is that this type of trading can be done in only 15-60 minutes per month.  

 Selecting Companies  

For Allen, selecting stocks to purchase isn’t really rocket science.  It’s a rather basic process of looking for companies that he thinks will last for 100+ years. He suggests looking for big name companies that you are a customer of yourself, or companies with which you are already familiar.  If the company offers good dividends they are usually cash-flow positive, and therefore a good company to invest in.     

Time To Dump That Stock

As a general rule, Allen Sama buys and holds his stocks for years.  He’s always thinking long-term.  If the underlying fundamentals of a company change, that’s when it’s time to sell the shares.  Allen looks for things like: a CEO leaves or dies, a restructuring, employee lay-offs, dropping revenue, cutting dividends, closing stores, or not expanding. Sometimes you simply need to cut your losses and move on.  

Dreams of Climbing Mt. Kilimanjaro

By his 50th birthday, Allen wants to trek up the mountain with his wife and three children.  It’s been a dream of his for years.  Unlike other massive mountains, Kilimanjaro is manageable without years of preparation and extensive amounts of equipment.  The journey can be made in a few days, and you can enlist the help of an outfitter. Allen looks forward to creating this lasting memory with his family one day.  

Resources & People Mentioned

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Disclaimer: Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.