Basics -How to start trading CME Case Shiller futures and and options (for retail accounts)

After multiple inquiries, I thought that I’d pull together my responses of FAQs related to “how do I trade CME housing futures” into one blog (that I will update over time).  If anyone has ideas that would improve this list, please feel free to contact me (

Understanding Reference Obligations: 

  • To trade any future it’s important to know how the reference obligations (in this case the Case Shiller indices) are calculated.   There is a write-up of how the Case Shiller indices are calculated in Reports section, or you can access here.
  • There are many different home price indices that perform differently due to either geographic coverage (broader vs. more narrowly defined), inclusion in index (e.g. repeat-sales vs new sales, those with FHFA conforming mortgages vs all homes), seasonally adjusted (or not),  and/or calculation method (e.g. repeat-sales vs. hedonic).    Note that the CME contracts reference the Case Shiller NSA (non-seasonally adjusted) indices which are based on a repeat-sales methodology with geographically wide coverage areas.
  • Trades referencing other indices can be done but in OTC (over-the-counter) contracts.

Format of Futures Contract:  There is “An Introduction to Case Shiller Futures” in the Reports section( or you can access here)  that should help explain the structure of the contracts. Some key highlights include:

  • There are 11 regions (one for the Case Shiller 10-city index, and one for each of the ten components),
  • Each region has 11 expirations.
  • Each point is worth $250 so the notional value of a contract priced at 200 is $50,000.
  • Contracts expire on quarterly cycles of G (Feb), K (May), Q (Aug), and X (Nov) months.
  • Contracts settle on the index value released in the settlement month (the last Tuesday).


  • The CME establishes minimum margins (both upfront and maintenance) that your broker might make larger.  That said, my sense is that margins have been running <5% of the notional value of a contract.
  • Each brokerage firm has their own fees for trades and other services (e.g. wiring funds).
  • Best to allow some time before first trade to open account.

Account Opening:

  • You need an account at a futures broker that allows their clients to trade the Case Shiller home price index contracts.
  • Their role will be to screen for suitability, and  KYC issues.   (I’m not aware of any licenses required by users to trade).
  • Any trade you execute will have the CME as counterparty (so I’m not your counterparty on CME trades).
  • I’m aware of two firms – Interactive Brokers and Insignia Futures -that allow trading in outright CS futures for individuals.  IB is a good platform for those comfortable placing orders electronically.  Insignia (contact Joe Fallico) is better if you need human involvement (but they also have an electronic platform).
  • Insignia allows trading in a broader range of orders to include: inter-city and calendar spreads, as well as options.
  • Please let me know of any other firms that will allow retail to trade these contracts and I will alert CME and post to my website.

Futures contracts:

  • I try to make sure that there is at least 1×1 (one lot bid vs. one lot offered) across all contracts out to about the 7th expiration (today X20) via quotes from me or others.
  • At present, many will be mine, but anyone can post a bid or offer.  My sense is that the 1×1 market helps in “bracketing” bid/ask discussions, as well as creating graphs.  On some contracts (typically the 10-city index, CHI, LAX, and SFR contracts) there have historically been quotes in longer-dated contracts.

Trading: Here’s a few ideas on how to approach placing futures orders:

  • Since many markets today are quoted 1×1 I strongly advise not to place market orders for more than than the amount bid.  This is currently a thinly traded market with often limited depth to the bids or offers.
  • Please feel free to contact me if you’d like to discuss trading more than one lot.  I may have interest at (or inside) posted levels for up to 10 lots.  Several of the 5-20 lot futures/option trades that took place over the last few years (particularly in options) started this way.
  • Note that my interest is as a trader.  I am not offering guidance or financial advice.  While the CME is the counterparty, I may be the person taking the opposite position of yours.
  • I’m happy to network/market/blog/tweet any trading axes for larger orders.   (Thin hub-and-spoke information model).   Feel free to sign up for blogs on my website (, tweets (@HomePriceFuture), or send me emails (  In the past, smaller trades (e.g. 5 lots) were useful for prompting discussion, and narrowing bid/ask spreads -key to bringing in traders who might be willing to trade larger sizes.
  • My sense is that a disproportionate share of trading seems to take place in the first and last hour of trading days, particularly on days when information that might have more of a direct impact on home prices is released (most notably the two days before and after Case Shiller #s are released.)
  • The minimum quote increment for futures is 0.2 (=$50), and for options is 0.1 ($25).
  • Some vendors describe the 10-city contract using the symbol HCI.  Some use CUS.
  • Calendar spreads may be quoted differently (i.e. with signs reversed) on different platforms.


  • Options (both puts and calls) can be traded on any region, for any 5-point strike, for any of the 11 expirations.
  • Given the 1000+ option permutations, I tend to only post live quotes on 10-20 contracts.  Those posts are concentrated in areas where I’ve seen the most interest, namely 9-18 month term puts where the strike is about equal to the spot index.
  • The Case Shiller options are options on the futures contracts -not options on the index.
  • Options are exercisable European-style (i.e. at settlement).
  • I’m open to proposals on many types of option strategy trades.
  • While there was a lot of option trading when the contracts were introduced in 2006, volume has collapsed.   That said, I believe that options may be a very useful fit for retail clients as total exposure (for buyers) is known upfront.

I hope that this is enough to answer many “how to get started” inquiries.  As noted above, please feel free to contact me if you have ideas: a) on how to improve this post, or b) any trading ideas.






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