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I recently completed the Platinum Pursuits Tradeability Income course presented by Daniel Kertcher. I was quite apprehensive about it, and that wasn’t helped by the negative comments about Daniel and his company on this and other trading forums. However, it is inevitable that anyone who charges thousands for their courses is going to be treated with suspicion, and the content of the course really had me interested, so I decided to part with my $3,200 and do the course. Now I hope here to provide an insightful and unbiased account of the course and its potential to fulfill its promises for anyone who may be considering undertaking it.

Firstly I must say it is disconcerting to me when you get the usual crap on their website saying that you have to get in quick because they limit the courses and if you don’t book early you will miss out, then the presenter proceeds to tell you that they have to charge these ridiculous amounts to cover the costs of holding the seminar (yeah right….). Daniel is a very good salesman, there is no doubt about that, but does his course deliver what it promises? Well, yes….and no.

The Tradeability Income course is basically all about covered calls, however instead of using shares that you already own you buy the equivalent cfd’s to cover your calls. The idea is that you sell well in the money calls (usually the strike is about 10% or so below the share price at the time of entry) so that the share price can drop considerably without it affecting your income from the trade. You then place a guaranteed stop to limit any potential loss and you have a virtually foolproof strategy. You simply deduct the trading costs from the premium you receive from selling the call and that’s your income for the month. And you can do all this in 30 minutes a month, just set and forget. Of course it’s not that simple, regardless of how much Daniel will try to tell you so.

The strategy uses US shares as they have greater liquidity and the options require only 100 shares per contract rather than the 1000 shares required for Aus contracts. As such it enables you to trade this strategy with less capital. It is done on a monthly basis where the positions are closed on option expiry date (Friday), then the next round are opened on the following Monday. So essentially we want every stock to either go up, stay the same, or go down a little. So long as at the end of the month the share price has stayed above the strike (or above the stop loss which is set slightly below the strike) we pocket the income. The risk is if we get a substantial decline like we did in May 10, and find that most or all of our trades get stopped out, we could incur a substantial loss. However this is a long term strategy and the idea is that over time it should generate a good income.

The blurb that I got before I did the course was that for the first 3 months of using this strategy (note: this is a very new strategy that only people who have done Daniels course can do as for the moment there is only 1 broker, IG Markets, who allow the strategy and they will only allow access to Daniels students) the return averaged about 12% per month, annualized to around 150% yearly return. And you can trade using as little as $5,000. Sounds impressive huh? Well, it may not be quite as impressive as it sounds. Firstly, that return was from the 3 months after the big drop in May when volatility was high and the market rallied back strongly. The past few months volatility has dropped off and I would estimate the monthly returns would be closer to 5%. Still not too bad though – 60% beats the banks doesn’t it? Well, yes, but there is a catch (and guess what, they don’t tell you this before you do the course!). That return is based on selling 8 contracts of each option (and buying 800 shares). Now, this strategy trades US shares, and some of them are valued at over $100, with many valued at $60+. Some quick maths – 800 shares in a company trading at $120 is $96,000. If the margin is 10% then you will need to put up $9,600 just for one trade. The idea is to take about 10 trades in order to spread the risk, so if the average price is ,say, $60 and the average margin is 7.5% (some stocks will require 5%, some 10%), then the amount you will need to buy 800 shares of each is $36,000. So unless you have a bank of about $36,000, don’t expect to get the returns they are spruiking. But wait! Guess what? There’s something else they forgot to tell us before doing the course. Those returns are assuming that you invest your entire bank into the trades. But you can’t do that, because you need a buffer in case the shares drop and your margin requirements increase. Daniel recommends investing no more than 40% of your bank. So now, in order to make the sort of money you thought you were going to make you need a bank of $90,000. You can trade with less and still make money, but can you trade with $5,000? No way! I would say the minimum bank you need is $20,000 in order to make it worthwhile. The problem is that once you go below the 800 shares the costs of the trade such as commissions etc eat a bigger hole into the income from the call. And here’s the other thing, those returns don’t include guaranteed stop losses. Daniel doesn’t use them (even though they are one of the big selling points of the course), and if he did the returns would be considerably less. In fact, trading on a bank of $20,000 with the current returns, using a stop loss will turn most trades into a loss, making them pointless to enter.

So, things aren’t looking quite as rosy now. I have been trading this strategy now for 2 months on a $20k bank and have so far only entered 5 trades with an avg return of about $50 per trade. I have made about $250. I have a long way to go to recoup my money invested with Daniel, however I have made money so far. If I had a $100k bank though I could have entered more trades and got better returns, and would probably have already recouped my money. In order to make this strategy more viable for those with a small bank there needs to be more volatility in the market to improve the returns. However that of course comes with extra risk, and without guaranteed stops then one bad trade that gaps well below your stop could significantly impact on your profits and turn your month into a losing one. With increased returns it may then become viable to place guar stops, but of course your returns will be heavily reduced. I was quite nervous when one of my stocks reported a couple of days ago. It was well above my strike, but a gap down of, say, 25% (which it had done not long before) would have well and truly wiped out any profits I had already made. It did gap down about 8%, but thankfully stayed above my stop and then proceeded to go up 15% the next day!

Also, the strategy sounds simple, but beginners will find it very tricky to get to grips with. I have been trading for 8 years and still found it quite nerve-wracking the first time trying to get the returns right. A small move in the share price can turn a reasonable return into a poor one if the option price doesn’t move as well, so you need to be on the ball. You also need to be checking the trades every day because if something goes wrong you have to attend to it. If you get stopped out you need to decide whether to buy back the option or let it go, or possibly purchase another cfd. Also, you need to subscribe to their income report which is about $450 per year (first 4 months free) and you have to purchase MarketAnalyst software for $888 per year because it has the calculator for the covered calls so you can see the return you are getting. They also forgot to tell us about that……

So, there’s quite a few gripes. On the positive side, the support from PP is excellent. I have had queries which have been answered in depth, and the videos and info on the website are very good. Daniel also appears to be very knowledgeable on the subject and teaches it well. Actually I have simply bought a couple of the cfd’s (of trades they have recommended) rather than doing the covered calls and have made money this way instead when the income returns have not been worthwhile and I have thought the chart looks strong. In fact, if you look at the trades they have recommended over the past few months, if you had just bought all the cfd’s and placed guaranteed stops at 10% away (or even if you just put in normal stops) you would have made a killing with a good exit strategy. Of course that’s not what this strategy is about, but it’s something that I will be doing if the chart looks good as the potential returns are much greater than those from the income strategy. So I must say that so far their research and recommendations have been very good, though the market has been very accommodating.

Bottom line: I don’t think what Daniel is promoting is a scam. However I do think there are some serious misrepresentations and I would not be surprised if there were a number of disgruntled people out there. And the truth is that no matter how good a strategy is, probably only 10% of people will make good money from it regardless. Do I regret doing the course? No. As a result of doing the course I have opened myself up to the US market which I have never traded before, and so far the trades I have made have paid off a fair bit of the course costs. With a larger bank the strategy would be much more attractive, so it is something that I believe will reward me down the track. Would I recommend it to a friend? Probably not, unless they had a large bank to invest and had the right mindset to approach it with. It certainly has the potential to be quite lucrative for the right person.

Sorry to be so longwinded, but hopefully this may help someone make an informed decision before deciding to attend the course. Cheers.
 

tech/a

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I have been trading for 8 years

So why on earth are you paying someone to do a course?
Surely after 8 yrs you have your own method down pat and are profitable?

If you really must trade it wait for volatility to return --- until then trade differently.
 

skc

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Now I hope here to provide an insightful and unbiased account of the course and its potential to fulfill its promises for anyone who may be considering undertaking it.

Very good summary. Indeed it was unbiased. Thank you.

Guaranteed stops probably get more expensive when volatility increases so the use of them as part of the strategy is kind of pointless. In fact, if you think from IG Markets' perspective on how they hedge your guaranteed stops, you will realise that they probably do some oppie trade to square you off - which means you have just arbitraged nothing and paid a lot of brokerage and fees.

But without using them you are leveraging your account at CFD multiples and really is just asking for trouble in the long term.

I can see this strategy suits the need of IG more than the trader!
 

IFocus

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

so I decided to part with my $3,200 and do the course. Cheers.

The price is really the outrageous part of this type of so called education (I paid similar amounts years ago to snake oil types)

And its not that they don't have anything to offer but its the whole trip of pulling in punters who like you say only a very small % will profit in the markets and most likely not using the sold trading scheme.

Also like you say there is the selling of products along the way to at special reduced prices just for you.

Last comment is that using covered calls is great for brokers.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

So why on earth are you paying someone to do a course?
Surely after 8 yrs you have your own method down pat and are profitable?

Really? Is that the best you can offer? I take a lot of time to give an unbiased account of a course so that people can make an informed decision, and the best you can do is take a pot shot at my decision to take the course? Blimey! The fact is plenty of people will consider taking the course, and hopefully some of them will read this and then have a better understanding of what the strategy involves and whether it is for them or not. This post is not about me!!

Whether or not I am successful with my trading is irrelevent. Do you really think that the worlds most successful traders just have one strategy? The strategy offered by Daniel is completely different to anything that I currently do, and there is great appeal in having a more passive strategy that can be pretty much set and forget (though as I pointed out that's not really the case). Before this course had even been created I had thought that writing calls on cfd's would be a really good strategy, but thought it was not possible. When I heard about the course I was really interested, and the fact is the only way to be able to use the strategy was to do the course (which meant forking out the $$$'s). I don't like spending that sort of money on a course but I felt on this occasion it was justifiable. And I don't regret it even though I am disappointed with some of the details that were left out of the introductory seminar and promotional material. People have different reasons for doing things, and it's really not your place to question my motives for doing the course.

As I said before, this can still be a very good strategy for the right person. If I was trading a $100k bank there is a fair chance I would have recouped most if not all of the costs of the course already in only 2 months and that in a market not really conducive to good returns. That's not bad at all, however only time will tell how successful it is over the long term. But traders with smaller accounts, and inexperienced traders, need to think carefully whether it is for them.

Cheers.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

As I said before, this can still be a very good strategy for the right person. If I was trading a $100k bank there is a fair chance I would have recouped most if not all of the costs of the course already in only 2 months and that in a market not really conducive to good returns. That's not bad at all, however only time will tell how successful it is over the long term. But traders with smaller accounts, and inexperienced traders, need to think carefully whether it is for them.

Cheers.

I doubt it. Asit stands, it is still picking up pennies in front of a steam roller and the cost of the guaranteed stop removes any positive expectancy.

As with all option trades, there is a time to put them on and a time not to, depending on volatility.
 

So_Cynical

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

The fact is plenty of people will consider taking the course, and hopefully some of them will read this and then have a better understanding of what the strategy involves and whether it is for them or not.

I've only just realised that the type of people looking to do this type of course are mostly, probably the sort of people who shouldn't be wasting money on any sort of education...im thinking that they have either failed as investors/traders and or feel overwhelmed by the reality of direct investment/trading.

I mean anyone can be taught how to play golf but no amount of education is going to make anyone a Tiger Woods or for that matter a Matt McQuillan (World Ranking 1000)

Whether or not I am successful with my trading is irrelevent. Do you really think that the worlds most successful traders just have one strategy? The strategy offered by Daniel is completely different to anything that I currently do.

Yes i would of thought that the vast majority of successful traders/investors would have just one strategy, something along the lines of buy XYZ and then sell it for more than you paid for it....personally i have a strategy that's making me money so why wouldn't i just keep following it, i cant see why anyone with a winning strategy would want another one.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

What about Currency risk, if we are talking longer term,in trading this technique? Or am I missing something?
 

tech/a

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I've only just realised that the type of people looking to do this type of course are mostly, probably the sort of people who shouldn't be wasting money on any sort of education...im thinking that they have either failed as investors/traders and or feel overwhelmed by the reality of direct investment/trading.

I mean anyone can be taught how to play golf but no amount of education is going to make anyone a Tiger Woods or for that matter a Matt McQuillan (World Ranking 1000)



Yes i would of thought that the vast majority of successful traders/investors would have just one strategy, something along the lines of buy XYZ and then sell it for more than you paid for it....personally i have a strategy that's making me money so why wouldn't i just keep following it, i cant see why anyone with a winning strategy would want another one.

MATTEO

So Cynical has summed up my thoughts and saved me a lot of typing.
Wayne's used a sledge hammer to drive home the point.
Thanks.
 

skc

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Do you really think that the worlds most successful traders just have one strategy?

I mean anyone can be taught how to play golf but no amount of education is going to make anyone a Tiger Woods or for that matter a Matt McQuillan (World Ranking 1000)

Yes i would of thought that the vast majority of successful traders/investors would have just one strategy, something along the lines of buy XYZ and then sell it for more than you paid for it....personally i have a strategy that's making me money so why wouldn't i just keep following it, i cant see why anyone with a winning strategy would want another one.

I personally have 4 strategies going - it creates a relatively smoother equity curve and for full time trader relying on trading income it is very important imo to have multiple strategies.

This is my monthly return for the last 6 months. Account 1 runs 3 of my strategies and account 2 runs the 4th one. Both accounts are similar size.

account return.png

See how the average of two account resulted in a standard deviation of only 1.41% as opposed to 4.04% and 4.19% for the two individual accounts. Smaller standard deviation = smoother equity curve = many benefits to trading psychology.
 

tech/a

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

SKC

Nice returns!
41% ish
From my calcs to trade full time you would need a minimum of $300k to run this comfortably allowing for tax and generally living.
About right?
Obviously $500k + and its a snap!
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I doubt it. Asit stands, it is still picking up pennies in front of a steam roller and the cost of the guaranteed stop removes any positive expectancy.

As with all option trades, there is a time to put them on and a time not to, depending on volatility.

That says it all really. But that takes time and effort to learn the greeks, synthetics and other stuff. I have heard some option "educators" say that you don't need to know about those things.

Maybe my better half could start weekend flying courses. "How to learn to fly in a weekend". Just show people how successful others have been and never mind about all the technical stuff...:eek:

Sometimes a little knowledge can be very dangerous.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

That says it all really. But that takes time and effort to learn the greeks, synthetics and other stuff. I have heard some option "educators" say that you don't need to know about those things.

Maybe my better half could start weekend flying courses. "How to learn to fly in a weekend". Just show people how successful others have been and never mind about all the technical stuff...:eek:

Sometimes a little knowledge can be very dangerous.

Yes.

But the Greeks take time to grasp properly... at least for booze addled old farts like me :eek:.

For OP, to evaluate this properly, I would suggest getting a grasp of volatility as it relates to option pricing, standard deviation... and perhaps a little bit about kurtosis to understand why this Kertcher "strategy" is a loser.

Then move on to the other Greeks to understand options fully.
 

So_Cynical

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I personally have 4 strategies going - it creates a relatively smoother equity curve and for full time trader relying on trading income it is very important imo to have multiple strategies.

Well i knew someone would post something along these lines and that's why i said "vast majority" because i know some people have a multi tasking type of brain and are/will be comfortable with multiple strategy's...myself ive got enough on my plate with 10 open positions to manage and 1 broad strategy. :D
 

skc

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

SKC

Nice returns!
41% ish
From my calcs to trade full time you would need a minimum of $300k to run this comfortably allowing for tax and generally living.
About right?
Obviously $500k + and its a snap!

Actually the return is only 20 ish percent. The return % listed is on each account, so the total return across all capital deployed is only 20 ish percent.

Thankfully my total capital is over $1B so a 20% return in 6 month is just enough to live off. :p:

Well i knew someone would post something along these lines and that's why i said "vast majority" because i know some people have a multi tasking type of brain and are/will be comfortable with multiple strategy's...myself ive got enough on my plate with 10 open positions to manage and 1 broad strategy. :D

As far as I am aware you are not a full time trader. So stick to what you know works best. As a full time trader who isn't really doing intra-day trading - I get pretty bored if I am not doing more than 3 things at a time!
 

Julia

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Thankfully my total capital is over $1B so a 20% return in 6 month is just enough to live off. :p:
Is that American billion or English billion, i.e. a million million, or a thousand million?

Presumably you regularly appear on the Australian "Rich List"?
 

skc

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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Is that American billion or English billion, i.e. a million million, or a thousand million?

Presumably you regularly appear on the Australian "Rich List"?

Yes. A million million. Although I did not specify any currency.

I am reasonably sure that my capital is in excess of $1B in at least the ZWD currency.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

The strategy is all about brokerage.
Buying $400,000 stock on $36,000 margin means you have to pay brokerage on $400,000 of stock plus IG charge borrowing cost on the value of the stock on a daily basis.
Plus commission or spread on the call option
Plus cost of closing.

Buy stock sell call = sell put

Buy BHP @ $40 is $400 brokerage. Sell $36 in the money call
30 day funding cost = about $2,200. Close brokerage is also $400.

The same strategy is to sell a $36 Put. Save $3,000. Same pay off.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

The strategy is all about brokerage.
Buying $400,000 stock on $36,000 margin means you have to pay brokerage on $400,000 of stock plus IG charge borrowing cost on the value of the stock on a daily basis.
Plus commission or spread on the call option
Plus cost of closing.

Buy stock sell call = sell put

Buy BHP @ $40 is $400 brokerage. Sell $36 in the money call
30 day funding cost = about $2,200. Close brokerage is also $400.

The same strategy is to sell a $36 Put. Save $3,000. Same pay off.


Ahh but the educators like to complicate things a little. Perhaps it makes them look clever...:D

Funny thing is that some of them will point out the dangers of naked puts but seem to be oblivious that the covered call poses a similar payoff.

It's the brokers that prefer covered calls as they pose no risk to the broker. If price goes down, the customer takes all the risk with his shares.

If the price goes down with a naked put, margins keep increasing and can make a broker nervous. Although, some Oz brokers will only allow fully cash covered naked puts so the risk to them is then comparable to the covered call.
 
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Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Ahh but the educators like to complicate things a little. Perhaps it makes them look clever...:D

Funny thing is that some of them will point out the dangers of naked puts but seem to be oblivious that the covered call poses a similar payoff.

It's the brokers that prefer covered calls as they pose no risk to the broker. If price goes down, the customer takes all the risk with his shares.

If the price goes down with a naked put, margins keep increasing and can make a broker nervous. Although, some Oz brokers will only allow fully cash covered naked puts so the risk to them is then comparable to the covered call.

But in this case the margin risk is the same because you are borrowing $400,000 (you dont get interest on your deposit with IG, I think).

The risk is BHP going from $40 to $36.

If BHP goes to $36, IG will want at least another 5% ($20,000).

The margin of an at-the-money February BHP Put is less than 6%.

Both have 100% downside risk.
 
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