Housing Index Futures and Options
In Q2 2006 the CME launched contracts linked to housing index prices. Housing Index Futures and Options provide a means for institutional and individual investors to assume real estate risk and diversity their portfolios with the multi-trillion dollar single family home market. The new contract will also provide an efficient hedging mechanism for commercial and private real estate owners.
In contrast to Real Estate Investment Trusts or REITs the CME futures contracts better track the value of residential real estate.
The CME offers contracts for metropolitan Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, District of Comumbia, and also a composite of all 10 cities.
Each contract is worth $250 x the index number, with a tick value of 0.20 index points or $50. The contracts are listed quarterly with February, May, August and November expirations.
Trading takes place on the CME Globex system Sunday through Thursday from 5PM CST to 2PM the following day.
