Basics -FAQs on trading Case Shiller futures

One of my conclusions from how the markets reacted over the last week is that I need to spend more time marketing, and less energy market-making (in some of the contracts with less interest).  It is important that more people feel comfortable in using the product.  With that more bids and offers will (hopefully) come, and the market making will then be a lot easier.

To that end, I’ve gone back to drawing board on a marketing plan.  Step 1 is a set of FAQs.  I’ve posted what I hope will be a growing list of ever-expanding answers in the Reports section.  Any suggestions for new topics or edits are appreciated.  (I’ve taken down the original FAQs page, but will still try to handle and “Ask a Question” inquiries.

To stimulate discussion, the list of topics in FAQs outline includes:

  • How do the housing futures work?
  • What’s the notional value of a contract?
  • Why is the contract quoted at 17000 and the index is quoted at 170.
  • What is the minimum price move?  What is the value of the minimum price move?
  • How are contract settlements determined?
  • What is the last trading day for a contract?
  • What are the Case Shiller regions?
  • Why are there only ten regions?
  • Where can I find a description of the areas covered by each of the ten regional Case Shiller indices?
  • How does the Case Shiller index work, and how is it different than other home price indices?
  • What are the trading hours?
  • How much margin is required?
  • What kind of orders will the CME take?
  • Which clearing firms will handle Housing futures?  (My broker doesn’t is a common lament)
  • What kind of “linked” trades are allowed in housing futures?
  • How many contract expirations are there?  What are they?  What’s the longest one? When does the CME roll out a longer contract?
  • How do I find trade volume, open interest?
  • Where do I get information on trading, quotes?
  • What should I expect for bid/ask spreads (when I reverse my trade)?
  • What are bid/asks spreads?
  • Are there options?

Please feel free to contact me (johnhdolan@homepricefutures.com) on FAQs or any aspect of housing derivatives.