CME Housing Futures

Which way is the US housing market going?

  • The market will continue to rise

    Votes: 5 8.9%

  • The market will flatten out

    Votes: 8 14.3%

  • The market will drop

    Votes: 35 62.5%

  • Don't know or don't care

    Votes: 8 14.3%
  • Total voters
    56
Quote from guy2:

How is that missing from the Housing futures? It's all there as well. At the launch of the CME Housing Futures the creators of the index discussed the possibility of a dedicated set of professionals who would be able to do exactly that. i.e. arb the underlying against the future. Just like they do with S&P500 cash and future.
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Here's a link to the components of the S&P 500 industrials.

http://www.marketvolume.com/indexes_exchanges/sp500_components.asp

Could you do me a favor and shoot over to me the addresses, square footage and assessed value of the "homes" in the Chicago Housing contract? I want to check a few out. Also are any for sale?

Do you see the difference between contracts? To-morrow I will know the value of SPX to the 100th decimal. Nobody on FUCKING EARTH knows within perhaps 5% of "last" what the "value" of the Chicago housing market is. I repeat. This is tradesports.com or betonmarkets.com type stuff. Not that there's anything wrong with that. Let two guys over drinks bet a hundo on "direction" in real estate. But as a serious vehicle? Hardly.
 
Quote from Pabst:

Could you do me a favor and shoot over to me the addresses, square footage and assessed value of the "homes" in the Chicago Housing contract? I want to check a few out. Also are any for sale?
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I don't know the composition of the Chicago Housing index and I'm not going to go hunting for it but it is published and it is possible to arb the actual physical houses against the future. Do you think that the CME would say that if they didn't believe it to be true?
 
It's "possible to arb"? Do you see anything in the trade, i.e. volume or tightness in the bid/offer that leads you to believe this product is being arbed? Arbed against what? Are you telling me that if I get lifted on a Chicago futures offer I can immediately buy SFH's in Naperville, Evanston and Skokie, two condo's in Lincoln Park and a partridge in a pear tree and be hedged at delta neutral?

The CME is a publicly traded corporation trying to sell a product that was expensive to develop. It's been over twenty years since ANY futures exchange has created a successful all new, unique product line. This adds to the list of failures.


Quote from guy2:

I don't know the composition of the Chicago Housing index and I'm not going to go hunting for it but it is published and it is possible to arb the actual physical houses against the future. Do you think that the CME would say that if they didn't believe it to be true?
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Quote from guy2:

True - those partridges are impossible to arb.
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I think they used to be deliverable against the CME's old Broiler's (Chicken) contract. :D


P.S. Sentiment in this thread's poll is so negative that it makes one want to play the fade and buy one of those million dollar mobile homes in Malibu. :p
 
That might not be a bad play. I remember the housing bust in London at the beginning of the 90's and the only areas unaffected were the affluent Chelsea & Kensington, Knightsbridge, and Mayfair where the prices continued to appreciate by 2 to 5% per year while the rest of the city (and country) plummeted. Isn't Angelina Joelie making Brad sell his and Jennifer’s old love nest in Malibu? There's one for you.
 
Actually you guys are on to something. Low-end, midrange, and high-end housing markets behave quite differently. And as much as I wish there were an easy hedge for my house (ok, trailer), the fact is, the CME product does not handle the low/mid/high end housing stratification.
 
But do one of the 10 cities behave like low, mid, high end housing markets - i.e. proxy.

New cities (Vegas) versus old cities (Boston)
City size...
 
Are these trading on IB yet? when I try to place an order, i get "No clearing rule found"

What other brokers let you trade housing futures?
 
Quote from 1011101:

Are these trading on IB yet? when I try to place an order, i get "No clearing rule found"

What other brokers let you trade housing futures?
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Which contract? I just placed an order for Aug 07 NYM and it went through (ie. went green right away).
 
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