A new (school) year starts with 15 trades

Summer's done, and it seems that all markets -including these CME Case Shiller home price index futures -have a "back to school"/ let's attack the New Year/ attitude. (Either that or the long-awaited debate as to when home prices will top has arrived).

After months of one-sided inquiries (all bids) with corresponding wide bid/ask spreads, this market evidenced some two-way action today in the form of 15 trades. Bids were hit, and offers lifted, driven primarily by inquiries from third parties. (Thank you for weighing in).

All of the trades were either the Nov '21 or Feb '22 contracts, and many were triggered by either calendar or intercity ("IC") spreads kicking in. (Note that tighter bid/ask spreads in the benchmark HCIG22 contract often lead to tighter bid/ask spreads in the regional contracts, so please continue adding quotes, and volume, to that contract).

There were trades in the HCI (10-city index), CHI, MIA and WDC contracts today, and better bids/lower offers quoted in others.

Here's quotes on all 11 regions for the Nov '21 and Feb '22 contracts at the end of the day. Bid/ ask spreads in the Nov '21 contract average 5.1 points (vs. 4.5 points at mid-day) with LAX being the tightest market.

Note that the Nov '21 markets are quoted well above the index values released in August -consistent with positive seasonals and momentum. The February contracts trade at even higher prices, although the gains from Nov. to Feb. are smaller (than Aug/Nov). There are calendar spreads quoted on all 11 regions (typically one lot by one lot), but I'd be open to negotiating levels for larger sizes or at inside quoted prices.

For now my intent is to focus my efforts on these two contracts, while trying to establish two-way markets in the G23 (Feb '23) expirations.

Please feel free to contact me if you'd like to discuss hedging strategies, or if you'd just like to learn more about how to use home price derivatives in hedging strategies.

Thanks,

John