HOUSING DERIVATIVES

Jose Canseco Exercises Free Housing Put Option

Reuters announced this week that Jose Canseco, a well-known US professional athlete and author, exercised his free housing put.  Mr. Canseco explained the exercise of his American-style put option:

"I do have a judgment on my home and it to me is very strange because it didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else," he said.... "I decided to just let it go.""

The housing straddles offered in the US housing market were free to all "home buyers."  Mr. Canseco received a free straddle with this particular house he "bought."

Housing Indexes: All-Time Highs and Where We are Now

These tables look at the high prices that US housimng made over the last two years and compares them to the spot indexes and what the derivatives markets project will be the full swing out two-three years.  Sources: Bloomberg, Radar Logic, TFS.

S&P/Case-Shiller Index - February 2008 v Highs
						Nov 2010 Future v   High Index
	High Month	Hi  Index	Feb 08	High v Feb 08	High v   Feb 08
Atl	Jul 07	136.47	125.83	(10.64)	-7.80%
Bos	Sep 05	182.48	160.31	(22.17)	-12.15%	-17.80%
Char	Aug 07	135.88	131.22	(4.66)	-3.43%
Chi	Sep 06	168.60	153.33	(15.27)	-9.06%	-19.45%
Clev	Jul 06	123.49	106.82	(16.67)	-13.50%
Dal	Jun 07	126.47	117.72	(8.75)	-6.92%
Den	Aug 06	140.27	127.50	(12.77)	-9.10%	-19.44%
Det	Dec 05	127.05	97.61	(29.44)	-23.17%
LA	Sep 06	273.94	214.83	(59.11)	-21.58%	-43.78%
LV	Aug 06	234.78	177.18	(57.60)	-24.53%	-46.33%
Mia	Dec 06	280.87	218.74	(62.13)	-22.12%	-39.19%
Min	Sep 06	171.12	145.93	(25.19)	-14.72%
NY	Jun 06	215.83	198.46	(17.37)	-8.05%	-22.07%
Pho	Jun 06	227.42	172.72	(54.70)	-24.05%
Port	Jul 07	186.51	176.24	(10.27)	-5.51%
SD	Nov 05	250.34	190.34	(60.00)	-23.97%	-38.64%
Sea	Jul 07	192.30	179.85	(12.45)	-6.47%
SF	May 06	218.37	174.54	(43.83)	-20.07%	-40.47%
Tamp	Jul 06	238.09	188.59	(49.50)	-20.79%
WDC	May 06	251.07	207.05	(44.02)	-17.53%	-26.71%
10-C	Jun 06	226.29	190.58	(35.71)	-15.78%	-29.12%
20-C	Jul 06	206.52	175.94	(30.58)	-14.81%
Radar Logic RPX - April 29, 2008 Publication Date v High Watermarks
						3 Year Swap v   High Index
	High Month	High Month	29-Apr-08	High v	High v
	Pub date	28 day Index	28 day Index	Index	Index
Atl	Aug 07	106.31	92.30	(14.01)	-13.18%
Bos	Oct 05	257.46	198.29	(59.17)	-22.98%
Char	Aug 07	101.62	97.15	(4.47)	-4.40%
Chi	Aug 07	205.19	160.13	(45.06)	-21.96%
Clev	Aug 05	99.59	85.94	(13.65)	-13.71%
Col	Sep 05	103.92	91.16	(12.76)	-12.28%
Den	Sep 07	152.56	128.00	(24.56)	-16.10%
Det	Oct 05	121.60	94.80	(26.80)	-22.04%
Jax	Jan 07	135.97	112.12	(23.85)	-17.54%
LA	Jun 07	401.65	319.68	(81.97)	-20.41%
LV	Jul 06	186.72	132.36	(54.36)	-29.11%
Manh	Dec 07	1184.95	1117.59	(67.36)	-5.68%
Mia	Jul 06	208.48	168.82	(39.66)	-19.02%
Milw	Aug 07	135.29	107.60	(27.69)	-20.47%
Minn	Aug 06	164.36	138.13	(26.23)	-15.96%
NY	Aug 07	310.00	290.01	(19.99)	-6.45%
Phi	Aug 07	164.59	148.65	(15.94)	-9.68%
Phx	Aug 06	167.81	131.87	(35.94)	-21.42%
Sacr	Nov 05	252.78	161.25	(91.53)	-36.21%
SD	Jul 06	357.34	253.79	(103.55)	-28.98%
Sea	Aug 07	236.16	217.56	(18.60)	-7.88%
SF	Aug 07	463.32	372.95	(90.37)	-19.50%
SJ	Jul 07	484.69	424.43	(60.26)	-12.43%
Stl	Jul 07	124.52	98.54	(25.98)	-20.86%
Tamp	Aug 06	147.18	115.26	(31.92)	-21.69%
WDC	Jul 06	267.18	211.83	(55.35)	-20.72%
25 C	Aug 07	278.32	239.26	(39.06)	-14.03%	-32.03%

S&P/Case-Shiller Index - February 2008

Today, S&P released the February 2008 S&P/Case-Shiller HPI data: S&P/Case-Shiller Index - February 2008
CME	Feb 07	Jan 08	Feb 08	Jan 08 v Feb 08	Jan 08 v Feb 08	Feb 07 v Feb 08
Bos	168.04	162.59	160.31	(2.28)	-1.40%	-4.6%	Bos
Chi	167.49	156.47	153.33	(3.14)	-2.01%	-8.5%	Chi
Den	134.86	128.98	127.50	(1.48)	-1.15%	-5.5%	Den
LV	229.64	186.05	177.18	(8.87)	-4.77%	-22.8%	LV
LA	266.63	224.41	214.83	(9.58)	-4.27%	-19.4%	LA
Mia	279.43	225.40	218.74	(6.66)	-2.95%	-21.7%	Mia
NY	212.52	200.49	198.46	(2.03)	-1.01%	-6.6%	NY
SD	235.54	197.45	190.34	(7.11)	-3.60%	-19.2%	SD
SF	210.78	183.81	174.54	(9.27)	-5.04%	-17.2%	SF
WDC	237.98	213.03	207.05	(5.98)	-2.81%	-13.0%	WDC
10-C	220.46	196.17	190.58	(5.59)	-2.85%	-13.6%	10-C
	Feb 07	Jan 08	Feb 08	Jan 08 v Feb 08	Jan 08 v Feb 08	Feb 07 v Feb 08