CME Futures On House Price Indicies

[jyl]

Anyone know about the CME's futures on house price indices, supposedly to start trading this summer? Do you think they'll be successful, liquid, tradeable, investable? Will there be a practical way to use them to hedge a physical house? E.g., to get leverage equivalent to that on the house, at least 5:1?

Thoughts would be welcome. I don't know much about futures.

[Paul_Heery]

They actually started trading today (May 22, 2006)

[jyl]

I see them now.

Do you know if there are options on these futures, or some other way to increase leverage?

[TheMentat]

Futures only require you to post margin. You don't "buy" a futures contract, you enter into a position. With effectively no money down, you've got about as much leverage as you'll need.

[jyl]

Thanks. You can tell I know zip about futures. I recall learning the valuation math in some derivatives class, but apparently I forgot it as soon as possible. Ditto options. I used to know something about them, built computer models to value bonds with all kinds of embedded putables and callables, but must have bent over to tie my shoes one day and all my brains fell out.