Trading Housing Derivatives

Tradable housing derivatives have been available to the public since 2006.  The CME lists futures and options on 10 S&P/Case-Shiller Home Price Indices.  Since last year, there have been actionable trades and transparent settlements for futures contracts for these 10 cities going out through November 2012.  RPX swaps were launched last year and those markets showed a clear downward view in housing prices.

Housing derivatives markets Download 10212008_tfs_housing_metrics.pdf are still pointing to lower net asset values for the US housing stock.  These futures showed systemic lower values as early as June 2006.  They were even in front of the popular ABX indices in many instances.

These derivatives will probably be the first ones to show a bottom in the housing market. 

Housing futures, options and forwards are tradable for investors. 

All opinions expressed herein are those of the author, and no statement should be as an offer to buy or sell any futures contract, or security or option or other derivative instrument. Trading of all such futures, securities, options and other derivative instruments entails significant risk which can result in substantial financial loss. Such risks should be fully understood prior to trading.  Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment advisor before making any investment decisions.