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If you are getting ready to add a home improvement addition to your house in the form of a room, car port, deck, or some other structure there are many things to keep in mind. It may look easy when others do a home improvement addition but if you do not mind your details then there can be damage to your house and potential problems with the town you live in.

When you do a home improvement addition there is much more to it than just throwing some walls up and then calling it a day, adding rooms and other features to your home require a great deal of planning on your part to not only make sure that the home improvement addition you are doing is up to code but that it is also going to mix well with the rest of your home. There are enough home improvement addition horror stories to fill a volume of large books so be careful.

The first step in an home improvement addition is to contact your local government and get the necessary permits for doing the work. There are a lot of reasons why permits are required and they are all required by law so make sure you get your permit and display it somewhere in your home where the officials can see it if the happen to be going by your home.

You may also need to submit blueprints for larger additions so check with your local government engineering department and ask them if the project you are considering will be requiring any submission of extra blueprints to revise the ones they may already have on file. It may seem a lot just to put on a home improvement addition but it does change the value of your house and can affect your taxes.

If Aren’t Qualified Then Get Someone Who is

On my own home there was a car port that was built after the house was built and the car port was attached to the rest of the house by the roof. Over the years the poorly constructed car port was starting to sink into the ground and it started to slowly pull away from the roof.

After I had been in the house for a few years I noticed huge water stains were developing on the wall in my kitchen from the car port pulling on the roof. The moral of the story is to make sure your home improvement addition is constructed properly or else you could do your home more damage than good. It is always exciting to be doing a home improvement addition but if you do not keep a diligent record of what needs to be done, then you could be in for more problems than you ever expected.

Ade Perillo writes articles and press releases for OzfreeOnline – this piece she made served as an article exclusive for http://realestate.ozfreeonline.com – which offers a comprehensive list of office & commercial real estates, apartment and house for rent, online real estate, house for sale, real estate property listing, real property search and an apartment finder to thousands of properties in Australia.

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Option pricing is a mystery to most traders. They struggle to comprehend terms like implied and historical volatility or intrinsic and time value, or the “Greeks” (Delta, vega, theta, gamma, rho…). These terms are intimidating and my experience suggests that at least half the folks you hear talking about them do not really understand very much about them. It is important to at least be intellectually honest about it and know what you don’t know. It is also a good idea to debunk your vocabulary and get what you do know (or think you know) right. And because it is easy to get a head ache from trying to read and comprehend the myriad of equations and models generated from minds of multi-degreed scholars speaking a language only they seem to understand, it is comforting to know you do not have to learn a whole lot about the technical math soup. It is however, mandatory that you gain some working skills in how to recognize and flow with the option prices or you will get whipsawed and shredded by them.

It is not unlike the engineering, manufacturing, physics and computer technology that goes into a modern car. Any 10 year old can start it and drive down the road or off a cliff. The skill to use it correctly is mandatory but the technical wizardry to understand and construct it is not.

So option pricing must be understood in order to trade with any consistency. One major point is that option pricing is not static or consistent. The pricing structure is a moving target because the interaction of the market and the Market Makers constantly adjust the pricing.

Price comes from the floor… Models come from laboratories and do not dictate where the price will go. Rather, they try to predict it.

Historically, the idea of options is not new. Ancient Romans, Grecians, and Phoenicians traded options against outgoing cargoes from their local seaports. Modern techniques derive their impetus from a formal history dating back to 1877.

* 1877- Charles Castelli wrote a book entitled The Theory of Options in Stocks and Shares.
* 1900- Louis Bachelier is recognized for the earliest known analytical valuation for options. His work interested a professor at MIT named Paul Samuelson.
* 1955- Samuelson wrote an unpublished paper titled, “Brownian Motion in the Stock Market.”
* 1956- A. James Boness wrote, “A Theory and Measurement of Stock Option Value”. His work served as a precursor to that of Fischer Black and Myron Scholes.
* 1969-1973- Fischer Black and Myron Scholes introduced their landmark option pricing model

No one discovered the “mother lode” but rather successive scholars added to the work of predecessors. Black and Scholes were noted with the Nobel Prize because of their leap forward and the remarkable accuracy of their model. Since 1973, other scholars have expanded the Black and Scholes Option Pricing Model.

* 1973- Robert Merton relaxed the assumption of no dividends.
* 1976- Jonathan Ingerson went one step further and relaxed the assumption of no taxes or transaction costs.
* 1976- Merton removed the restriction of constant interest rates. The results of this evolution are alarmingly accurate valuation models for stock options.

Ok, you think that is boring you should read some of the papers and equations (I have and it was not fun).

Modern option pricing techniques are among the most mathematically complex of all applied areas of finance but they have reached the point where they can calculate, with alarming accuracy. Most of the models and techniques employed today are rooted in the Black and Scholes model. One notable major advance is the Cox, Ross, Rubenstein binomial model widely used in more volatile stocks. In fact the brainiacs currently have 7-9 different models out there trying to out do each other. Here is the basic idea…

Option Pricing Model: A mathematical model is used to calculate the theoretical or fair value of an option. Inputs to option pricing models typically include:

* the price of the underlying instrument (stock): Fixed
* the option strike price: Fixed
* the time remaining till the expiration date: Fixed
* the volatility of the stock: Fixed
* the risk-free interest rate (e.g., the Treasury Bill interest rate): Fixed

The historical accuracy of the prediction is quite good but short term variations to the price models can and do “Kill” traders on a regular basis. In the long run the models are cool but they are THEORECTICAL and subject to CHANGE!!!!! The difficulty is that the vast majority of option traders do not have the knowledge or even the viewpoint to see the variation when they come. Nor are they able to reflect anomalies in the price structure when they look at an option chain to get a price.

This is one of the reasons I so dislike Prescriptive Option Strategies. The prescription dictates how to make the trade. It dictates buy/sell, strike price and which month. Well that’s just fine if the market stays constant and the price structure does not move. Ok… so “hey market, I am going to trade now… could you please just stay calm and act really normal and don’t do anything rash until I am through? Thanks, that would be real nice of you.” Somehow I don’t think it works that way. The real problem with most option traders is that they don’t know what they don’t know.

For example; today, with the stock at support and moving up it may or may not be a good idea to buy a call option. It may or may not be a good idea to trade the In the Money strike price. It may or may not be a good idea to trade the next month out. The pricing composition will reveal hidden potholes if you can read it. If the prescription can work, great! But if the pricing landscape is significantly off, you may have a prescription for disaster. Ignorance may be bliss but it is expensive.

Market Makers

One major area of misunderstanding is market makers. The market maker takes a risk by pricing and selling an option. The response by the market to the offering causes the market maker to make adjustments to the price. They have two goals… make as many traders as possible and try to make some money on most of the trades. They have two tools to try and make this work; the bid / ask spread and the cost of time. The market maker is taking the risk by entering into a contract with risk. They lay off that risk ASAP by either buying the same option (sell a 45 call and buy a 45 call) or buying stock to deliver in case of exercise. They neutralize their risk and collect a small premium for the transaction. If the buying and/or selling pressure, (coming from brokers and/or traders) starts to change they respond by pricing to meet the market action. They don’t know you, or stock you. They need you and don’t care if you make money or not. They just want your order flow. Many myths abound about market makers and you need to understand them and their motives. (See last newsletter: “Those Darn Market Makers”)

Volatility

Option pricing is most sensitive to volatility. The theoretical option price is derived using a historical volatility, usually 12 months. The model pricing reflects that time frame. Short term option trading and pricing is being done in an environment that is subject to current market whims and conditions.

The current climate can be very volatile and the long-term picture can be quite stable. That throws the pricing model off dramatically, but it is a tip to savvy traders. If the short term is more volatile than the historical, the prices will be pumped up and become expensive and unstable. Extra time value is pumped temporarily into the option to reflect the current conditions (higher perceived volatility). If the price action calms down or stabilizes, the “Fluff” can be drawn back out very quickly. For example, rising prices calm the market and reduce fear and volatility. The typical option trader does not see this and then feels violated and cheated when their stock moves in the direction of their trade and they don’t get the expected profit in the option. The market breathes a sigh and the volatility shrinks taking their profit with it.

An irony in the discrepancy between theoretical/fair value and the actual price is that the actual price is feeding the 12 month volatility and constantly adjusting it. Today’s erratic volatility will be smoothed into the ongoing, ever-adjusting, 12-month moving volatility number.

Next newsletter, I will introduce the X Factor Options Trading Graph and show you how to put all this stuff into a picture format. Pictures are easy to digest a lot of data (e.g. stock charts). My students often say, “Trading options without X Factor is like trading stocks without a chart”.

Options can seem simple as long as you don’t learn too much. But they can seem overwhelming if you try to learn too much. There is a happy medium. The ten year old does not have to become a manufacturer to start the car, but he does need some practice and maturing to get behind the wheel. Stay tuned.

See you in the free web seminars and I hope to see you in my “Trades Forge” 2-day trading camp.

Ryan Litchfield with Better Trades

Content Source: Better Trades & Bear Put Spreads
Submitted by: Automatic Article Submitter

Article Source: SuperPublisher.com

If you are looking for luxury in the Austin real estate market, have a look at the $9.25 million home recently put on the market by an Austin investor, Willard Hanzlik, and his wife, Cordelia. It is a beautiful and modern home with 9,090 square feet and it is currently one of the top ten most expensive homes in the Austin real estate market. The Hanzlik’s home was built in 2002 on a twenty acre lot that is thoughtfully landscaped with native Texas plants. With large windows, high ceilings, and a mixture of modern and natural elements throughout the home, it is a very inviting space for those who enjoy entertaining friends and family.

More Million Dollar Properties for Sale in Austin

For over a million dollars, potential buyers will literally live in the lap of luxury. The West/Westlake area of Austin offers several properties well into the millions of dollars with up to three stories, six bedrooms, sprawling lots, and over seven-thousand square feet of living space. These contemporary castles have so much to offer that if you are fortunate enough to be able to purchase one of them, you will feel like a celebrity or the king of your own palace.

In the Central Austin area, $5 million dollars will get you a lovely waterfront home with features such as a guest or boat house, a salt water pool, and about five-thousand square feet in the main home. A lot of care has been put into every detail of these luxurious homes, and they are worth every penny.

Average Buyers Can Have A Bit of Luxury, Too
You do not have to spend millions of dollars to find your perfect home in Austin. Starting for under $350,000 buyers can find luxurious features such as a master suite, unique slate showers, cobblestone driveways, jetted tubs, gourmet kitchens with stainless steel appliances, and more. When purchasing Austin real estate, potential home buyers really get their money’s worth. With a median home price of $312,500, Austin home buyers do not have to choose between luxury and affordability.

The Austin Real Estate Market
Although, not surprisingly, the Austin real estate market is slower this year than it was in 2007, there are better prices and more appealing deals that are keeping potential home buyers interested. For the past few months of 2008, the inventory in the market has been decreasing which is a sign of a strengthening real estate market. It is still a buyer’s market overall however, Austin real estate is weathering the storm much better than comparable cities throughout the nation. Homes that are listed for under $150,000 are not doing as well, though, compared to homes priced right from $150,000 to $400,000.

As specialists in the Austin real estate and Austin condos markets, VIP Realty offers in-depth market analysis and updated news, working as the forefront Austin discount real estate broker.

Article Source: SuperPublisher.com

European Investment Property Is Knocking; Answer The Door!

Many people ask the practical question, “How stable are European investment properties?” The truth is opportunities fluctuate, but there are many opportunities that exist all over Eastern and Western Europe that are worth investigating.

Do you know which German city is referred to as “the sleeping giant?” Berlin! A German opportunity that may be very lucrative is waiting to be tapped.

Is Bulgaria a country with lucrative European investment property? What you should be wary before investing in this country.

Are there more opportunities in Eastern Europe, rather than Western Europe? Some countries are off-limits for valid reasons. Find out what those reasons are, and which countries are hands-on.

Browse through my web site in order to gain some insight as to which countries are possible investment opportunities, and which ones are not. You may be surprised in what you find. Check out my overseas property investment page for a quick overview of where, what and why.

Now, if you are excited about European investment opportunities, there are a few more things that you should know before diving into the pool head first: What is your purpose for investing in property in Europe? Will this be a vacation home? Are you planning to retire there? Will you rent it? These qualifying questions could prevent you from investing in something that is not the right investment for you.

There may be business opportunities that are based on timing. When is the right time? Is it the right time for you? An investment doesn’t necessarily have to be a retirement home or a vacation home, either. There are other options out there to discover for you.

Investing in land does not only consist of laying down currency for a quick return, that there are a few avenues to travel that may be tricky. See my strategies on how to invest at, best-investment-property-tips.com/investment-property-strategy.html. You will understand the purpose behind investing, and be guided on a path to making significant investments with vision.

With the proper guidance, you will understand what it takes, and what you can and cannot do in the European property market, in order to create an opportunity or take advantage of one that already exists.

About Author:

Surrinder Ahitan offers free property investment advice and tips on how to invest in residential and commercial property for maximum returns. Visit http://www.best-investment-property-tips.com where he reveals more valuable insider tips and property secrets.

Article Source: SuperPublisher.com