passive income

Francis who went through the long path of self discovery, uncovering every stone in options over 17 years to attain this level of mastery.

A mastery that enables him to create a passive income from options.

In this interview, options master Francis Goh shares why options are suitable to create a passive income and how we can do it too.

“Selling Insurance”

Options is a great vehicle to generate passive income by “selling insurance”.
With options, we get to play the role of the bank marketmaker or “casino dealer” if you what ever you want to call it.
Basically you get to deal the odds to the players.
But even with that advantage, of course, you still need to the your homework.

Top down approach

This is how Francis prefers to do his analysis of the markets.
It’s a systematic approach which involves him keeping tabs on the broad market sentiment.
He does this with a popular website called Morningstar.
Then he goes into the fundamentals of the company which he wants to take trades on.
In the interview, he shares a couple of key features to what he’s looking at in a stock that he wants to play.

Risk management is still required in options

This was a lesson he learnt in his earlier trading years, back in 2008.
In his words, basically he lost a Toyota in a single night.
Of course he never wanted that to happen again.
Therefore, he came up with the current bread and butter “Lobster” strategy.
The “Lobster” strategy allows him to generate a passive income at very low risk.

Technicals matter

There’s still a component of options which requires us to decide some rough price levels.
So Francis does have his own method which relates price charts with fundamental data.
This helps to determine the price levels he’s interested in for his options trades.

During this long journey, he came to a realization, that no single strategy will work across all market conditions.
So what was the solution?

Click here to view the interview, where Francis Goh shares the solution and a few other key takeaways from his long experience.

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