I was traveling over February month-end and wasn’t able to compile a recap for February until now. (Work and technical issues also got in the way). However, the Feb recap is finally done. You can link to it here, or find it in the Reports section.
Here are the highlights from the summary page:
–There were 8 futures and 18 option contracts traded in Feb. (The one options trade was an unwind at a low price).
–Futures trades were concentrated in 2 regions (CHI/SFR) spread over 5 expirations, and across 4 dates. (I’d note that most activity from other traders was concentrated in these two regions, along with SDG and NYM).
–OI (Futures) gained one from 53 from 54, even as 5 Feb expired.
–Bids and offers were up strongly during the month. (I’d note that prices jumped more this month that any in the also two years. That said, the move only took quotes to the upper end of the trading band in the HCI contract that the market has been in for the last 2+ years).
–Forward curves stopped flattening.
–Bid/ask spreads were much wider, due to jump in prices.
–Calendar spread orders were triggered but there were no IC trades. (I still both of these as both very useful tools as well as platforms for good relative-value debates.)
I’m still hopeful that the CME announcement that they would open electronic trading for all 10 regions starting Mon Feb 5th will come to pass. I’ve been immersed in conversations with CME and IT departments but so far we are not “live”. I have one DEN option trade (that was done OTC) that I hope to clear when trading starts. In the meantime I’ve also received inquiries on options for DEN and MIA.
I did not include pages on options quotes in the recap as: a) I wanted to get a bare bones our report before any longer, and b) I suspect (hope) that options inquiries with start to trickle in once contracts are live. I’ll post readers as IT issues get resolved to tee up some trades.
I’ve put together a new section in the report with individual graphs for each region. My intention is to build out each page once option trading starts in the “other” 7 regions. (Recall that electronic trading is still feasible in CUS, CHI, LAX and NYM contracts. In fact 18 CHI options traded in Feb.)
Finally, I updated the home page to show some key graphs. I hope to blog about the S&P 500 vs. home price futures. I think that it’s a good graph to illustrate how separate the stock market is (with issues of changes to the tax code, repurchases of outstanding stock, and possible re-repatriation of offshore funds for corporations) with a metric (forward home prices) that represents the average homeowner. Gains in the stock market go back to early 2016 so this is not a short-term political point.
As always, feel free to contact me (email@example.com) if you have any questions, ideas, or trades related to hedging home prices, that you’d like to discuss.