Cheap Houses You Don't Want To Buy

On other hand, there are towns like that one in South Dakota where we stopped for lunch. The bulletin board had ads for cheap homes for sale, placed there by desperate home-sellers, each trying not to be last to leave town. There was a photo of a beautiful old five-bedroom farmhouse for $11,000. We looked up deserted street as we ate, and noticed that most of buildings were boarded-up. This town was (is) clearly dying, and didn't have anything to help revive it. Inexpensive homes are easy to find here, but I wouldn't take one for free.

Cheap Homes For Sale In Paradise

Maybe paradise is too much to expect, but there are many wonderful towns, from Florida to Oregon, where there are cheap homes for sale. So what does a town need in addition to inexpensive houses in order to make our list? Well, criteria are certainly subjective, but include at least following:

1. Population between 4,000 and 80,000. 2. A good library. 3. A good grocery store. 4. A movie theatre. 5. Cheap houses: at least six for sale under $50,000.

6. The town "feels" good.

When we researched and built our website, we broke towns up into two pages. One is for towns with houses for sale for less than $50,000. The other is for towns with really cheap homes for sale - under $30,000! Yes, they are still out there. Using a phone and internet, searching for your affordable dream home is easier than ever.

Fast forward 2 days. XYZ won legal battle! Investors are more confident of stock and price jumps to $72. The $65 Call is now $7 In-The-Money and its premium is now $8.00. The $65 Put is now Way-Out-Of-The-Money and its premium is now $0.25. If we close out both positions and sell both options, we would cash in $8.00 + $0.25 = $8.25. That's a profit of $4.50 on our initial $3.75 investment!

Of course, we could have just bought a basic Call option and earned a greater profit. But we didn't know which direction stock price would go. If XYZ lost legal battle, price could have dropped $10, making our Call worthless and causing us to lose our entire investment. A Straddle strategy is more conservative and will profit whether stock goes up or down.

If Straddles are so good, why doesn't everybody use them for every investment?

It fails when stock price doesn't move. If price of stock hovers around initial price, both Call and Put will not be that much In-The-Money. Furthermore, closer it is to expiration date, cheaper premiums are. Option premiums have a Time Value associated with them. So an option expiring this month will have a cheaper premium than an option with same strike price expiring next year.

So in case where stock price doesn't move, premiums of both Call and Put will slowly decay, and we could end up losing a large percentage of our investment. The bottom line is: for a Straddle strategy to be profitable, there has to be volatility, and a marked movement in stock price.

A more advanced investor can tweak Straddles to create many variations. They can buy different amounts of Calls and Puts with different Strike Prices or Expiration Dates, modifying Straddles to suit their individual strategies and risk tolerance.

If you want to read more information on straddles and other option strategies, visit http://www.option-trading-guide.com/options_guide.html