Global Investing: A New Hedge For Your House

Real estate market got you worried? Home-price derivatives promise to help lessen the risk of investing

If all the jabbering about a weakening housing market has made you glum at the prospect of your own home's losing value, then has the Chicago Mercantile Exchange got a portfolio addition for you. Since May, investors have been able to buy and trade options and futures contracts pegged to home prices in 10 U.S. cities, giving property owners a way to hedge against a bear market--and letting speculators place bets on the direction of house prices in San Francisco, New York City, Chicago, Las Vegas and elsewhere.

Think of a guy who is anxious that his hacienda in Miami might...

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