Categorized | Investing

Real Estate Futures Contracts

Real Estate Futures Contracts
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Although the future of real estate is still a question in the minds of investors but still they are trying hard to search the fastest way to play the market. Futures contracts are considered as the main source to balance the portfolio of an investor in different markets and even if the investors have a little knowledge in real estates they can boost up their profile.

The first trading of future contracts was made by the company Chicago Mercantile Exchange in 2006 which started its trade for the S&P Case-Shiller. Its main aim was to cover both the properties of US commercial and residential areas. They followed the Case-Shiller index developed in 1980 by the founder Karl Caser and Robert Shiller which helped them to measure the housing price movements. This index is also considered as the most reliable gauge and helped in many areas of housing prices.

If future contracts are traded at a centralized exchange then the market participants will have more financial leverages and facilities. Moreover, it is the best way to be guaranteed by the exchange so that the chances of contemporary default can be reduced. Not only the investors can have the benefits on movements in housing prices but also get the opportunity in doing investments in liquid short-term real estates.

These futures are helping investors to make a better decision in housing prices as well as they can obtain it with much lower capital necessities. Now, future contracts are available for ten major US cities including Washington Dc, Boston, San Francisco and Los Angeles.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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