CME Group real estate products

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In May 2006 CME Group began listing cash-settled housing futures contracts and options based on the S&P/Case-Shiller® Home Price and Composite Indices. On the commercial real estate side, CME Group introduced S&P/GRA Commercial Real Estate Index futures and options in October 2007. Trading of CME Real Estate indexes are electronically traded on CME Globex, the exchange's electronic trading platform.


Contents

Housing Contracts

CME futures and options on the S&P/Case-Shiller® Home Price and Composite Indexes, developed in cooperation with MacroMarkets LLC, make it possible to trade U.S. real estate values in either up or down markets in ten U.S. cities. They provide a means of hedging exposure to home prices, thus diffusing the potential impact of sustained declines in housing prices.

Housing values are tracked for 10 cities, including Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York City, San Diego, San Francisco and Washington D.C. In addition, a composite index containing all 10 cities is listed.[1]

Originally, "housing futures" had contract months that extended a relatively short time into the future. In September 2007, that time frame was extended to 60 months. Contract months extending out 18 months are listed on a quarterly cycle of February, May, August and November. Contracts listed 19 to 36 months out are available on a biannual schedule of May and November contracts. An annual November listing schedule applies to contracts listed 37 to 60 months into the future.

Commercial Real Estate Contracts

In September 2007, CME Group announced it was teaming with Global Real Analytics, a group involved in commercial real estate index products, to launch U.S. Commercial Real Estate futures and options contracts based on the GRA Commercial Real Estate Indexes (CREX)™. Trading began on October 28, 2007.

S&P/GRA Commercial Real Estate Indices (SPCREX) allow investors and speculators to protect against or gain exposure to the $5.3 trillion U.S. commercial real estate market. It features 10 quarterly cash-settled contracts based on property type and geography. The listings include a composite index; indexes on property types consisting of retail, office, apartments and warehouse properties; and five U.S. regional indexes covering Desert Mountain West, Mid-Atlantic South, Northeast, Midwest and Pacific West. GRA CREX data are based on recorded transactions and are revised monthly. [2]

Contract Specifications

Other CME Group Product Areas


References

  1. "CME Housing Futures". CME Group.
  2. "Commercial Real Estate Index Products Futures". CME Group.

Resources

CME Group Web site

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