While there were no trades this month in expiring Aug ’15 contract, I would expect that trading in Nov ’15 should pick up.
- There have already been 3 trades this week (BOS, CHI and SFR)
- Bid/Ask spreads are already <= 2.0 on all 11 contracts
- Other traders are weighing in with better bids and offers (and inquiries about hedging continue to come in).
- The Nov expiration cycle usually has the most interest and the largest open interest
- The impact of the stock market gyrations might impact Sept home buying decisions (which are in the indices released for November).
- The yuan devaluation and bust in stock prices might be key to the debate of SFR prices going forward
- Changes in forward home prices may have low correlations with the stock market
- There may have been a Fed rate increase by Nov, or talk of higher rates, that might impact affordability
- The overall debate of forward home prices continues to intensify.
- Based on the August contract expiration, opportunities for predicting index results might be profitable (see last Last Blog )
Given my workload, I’m particularly eager to try and accommodate trading in the front contract. While this may not have longer term hedging or investment benefits, longer-dated expirations will be more liquid with tighter and more-liquid front contracts.
Feel free to contact me (firstname.lastname@example.org) if you have any ideas or questions.