Chicago Mercantile Exchange (CME) , along with noted economist Robert Shiller’s MacroMarkets, Fiserv and Standard & Poor’s, have created a market exchange for futures and options contracts on home prices in ten cities in the United States . The data feed from the index is provided to Matrix from Tradition Financial Services (TFS) , a broker that executes housing futures and options.
Trading for this new index concept began on May 22nd and trading still appears relatively light so I only plan to post an update once per week.
Miami leads all markets with 196 contracts, followed by LA with 114 and San Diego with 58 contracts (none sold this week). Denver is on the bottom of the list with 13 contracts (one sold this week). To date, 649 contracts have been purchased (only 14 this week) with an open interest value of $442, 853. Still not a lot of activity.
Since the contract activity is still light, I wouldn’t place much faith in the pricing yet for the individual cities. Pricing for the 10-city index shows a 4.02% price drop through May 2007.