As my hope is to encourage more people to follow (if not trade) housing futures, let me start you off with a list of answers to the most commonly asked questions. (You’ll see that most of the questions have been covered before as I’ll reference the “Basics” section. As always, I’m always open to new questions)
Where do I get prices?
The CME posts live prices for the Case Shiller contracts. http://datasuite.cmegroup.com/dataSuite.html?template=hsng&category=Housing&exchange=XCME&strategyType=SP&selected_tab=real-estate You can also find prices on Bloomberg and other vendors as detailed in this blog. http://1a1.50a.myftpupload.com/?p=1110
How do the contracts work? What is their notional value?
See my PowerPoint presentation in the reports section http://1a1.50a.myftpupload.com/wp-content/uploads/2010/09/CME-Home-Price-Futures_Sept-2010.pdf It’s dated, but the themes are still valid. (Note to self -need to update)
When do the contracts trade?
While the CME posts live prices from 6PM to 3 PM (New York time) from Sunday night to Friday afternoon, and while my goal is to have prices for all 121 contracts all the time, I tend to focus on Tuesday mornings from 9 to 11. (See blog http://1a1.50a.myftpupload.com/?p=1295 outlining my thoughts).
While my focus is Tuesday (and that’s when you’re likely to find the tightest bid/ask spreads) I try to keep an eye on trading throughout the week, encourage any bids and asks that I see, and will be responsive to any inquiries
What do I need to trade futures?
In addition to an appreciation that these contracts are illiquid and a good understanding of the nuances of the Case-Shiller index, the most important step is to have an account with a futures broker that transacts in these contracts. See my recent blog for three suggestions http://1a1.50a.myftpupload.com/?p=1309
Are options traded?
Options were originally traded when the futures were first launched but have been dormant for the last few years. I am trying to re-awaken option trading, but for now they would have to be “pit-traded”. As no one is standing around waiting for trades, that means that trades would have to be arranged off-exchange and brought to the pit. I hope to have such a trade early this year.
Here’s my most recent blog touting those efforts. http://1a1.50a.myftpupload.com/?p=1301
Where to I find trade volume/open interest?
In addition to the CME website that shows prices, the CME posts trade volume and open interest daily. See the links along the right side of this site under “CME Resources” for links.
How do I keep up with the markets?
OK, this is self-serving Q&A #1. I try to “tweet” when trades occur. Please feel free to follow me at @HomePriceFuture. I won’t catch all trades so don’t rely on this. If you see trades and I haven’t posted, let me know and I’ll try to get the word out.
How do I learn more?
OK, this is obvisouly #2 self-serving but please feel free to skim through older posts, particularly the Basics section. I was hacked last summer and lost five months of postings (including several on options) and have been slow to rewrite them without encouragement. Let me know if some aspect of the contracts is missing and I’ll go back to the drawing board.
I’ve heard about new products from Radar Logic, (RPX index) that will trade on the CBOE. What’s the story?
As of mid-December, the CBOE intends to launch futures trading in the Radar Logic RPX index. I’ve posted what I know in the links on the right hand side of the home page under RPX/CBOE. I’ll update as I hear more.
What if I want to trade (a forward or an option) on an index that is not covered by the ten regional Case-Shiler indices?
Please get in touch and I’ll try to help you.
This should be enough to digest for a first-time reader.
Again, please feel free to get in touch at johnhdolan@homepricefutures.com. I’m open to any questions to trade inquries.
Happy New Year!