Archive for 'Basics' Category

Basics -Convergence: Feb 2016

By blogadmin - Last updated: Saturday, February 20, 2016

One of key features of using CME Case Shiller housing futures to infer home price expectations, is that in the long run the settlement price of the contract, that is, at expiration, is the index value released that month.  For … Read More

Basics – Taking another run at options -looking for 1 put writer

By blogadmin - Last updated: Saturday, January 23, 2016

While most of  my blogs have focused on the Case Shiller futures contracts, there are option contracts listed on the CME that can be traded.  However, I’m not aware of any volume since 2014.  Recently though, I’ve been receiving a … Read More

Basics – Hedging with Home Price Futures, FAQs

By blogadmin - Last updated: Thursday, January 21, 2016

Most recently edited March 2, 2016

I’ve been receiving an increasing number of inquiries from people who, probably for the first time in a few years, (maybe given what’s going on in the stock market) want to explore hedging.

I’d … Read More

Basics – CME Site describing protocol for closing prices

By blogadmin - Last updated: Wednesday, July 8, 2015

As pit trading at the CME winds down, the Exchange has made a concerted effort to clarify any potential changes in procedures to calculating closing* prices.  There are no changes to how housing contracts are closed, but I thought that … Read More

Basics – New contracts upon expiration

By blogadmin - Last updated: Friday, March 20, 2015

I had a question from a reader that reminded me that the schedule for rolling out of new contracts may not be intuitive to those that don’t follow the contract every day.  There are 11 expirations in the CME Case … Read More

Basics – Restarting Intercity (IC) spreads

By blogadmin - Last updated: Tuesday, January 6, 2015

Intercity spreads (IC) are a way to express a view on the relative price moves between two regions for the same expiration.  They can be handy trading tools if one has conviction on the future performance of one region versus … Read More

Basics – Understanding CUS10 values using new weights

By blogadmin - Last updated: Wednesday, May 28, 2014

I just got the answers that I was looking for in response to a reader’s question on how to tie out the CUS 10 index valuation using the recently announced new weights.  The net impact of this corrected approach- this … Read More

Basics: OK, so you’re bearish. What to do besides selling your house?

By blogadmin - Last updated: Saturday, March 29, 2014

It seems that a growing numbers of commentators are becoming ever-louder in their bearish views.  Yet few give their readers any practical advice as to how to put this “knowledge” to work.  Are they suggesting that people sell their houses … Read More

Basics: InterCity Spreads -converted to relative % gains

By blogadmin - Last updated: Tuesday, March 11, 2014

I continue to believe that while traders may approach outright markets with some caution that they can be more aggressive when expressing views of relative performance.  That is, they may not have a precise view about how much the LAX … Read More

Baiscs: CUS (10-city) Calendar Spreads

By blogadmin - Last updated: Friday, March 7, 2014

I had promised in the monthly recap for February to update a table of the HCI/CUS (10-city index) calendar spreads for the November expiration series.  Here you go.

Understanding calendar spreads is critical to trading housing futures, as the spreads … Read More