Bloomberg News

CBOE to Offer Home-Price Futures Tied to Radar Logic Indexes

January 26, 2012

Jan. 26 (Bloomberg) -- CBOE Holdings Inc., the biggest U.S. options market by volume, will begin trading of futures tied to U.S. home prices.

Barclays Capital will serve as the designated primary market maker for the contracts, which will be linked to Radar Logic Inc.’s 25-Metropolitan Statistical Area Composite Index, Chicago-based CBOE said today in an e-mailed statement. Contracts on additional indexes from New York-based Radar Logic may be added later, according to the statement.

“We are pleased to partner with Radar Logic to bring to market the industry’s first real estate futures contract featuring comprehensive national residential real estate values and daily pricing,” James F. Lubin, a managing director at CBOE’s CBOE Futures Exchange LLC, said in the statement.

Potential users of the contracts could include mortgage lenders, fixed-income investors, developers and insurers, according to the statement. Trading will start Feb. 2.

Derivatives tied to Radar Logic indexes have been traded over-the-counter since at least 2007. In 2006, CME Group Inc. began listing contracts linked to the S&P/Case-Shiller price indexes created by economists Karl Case and Robert Shiller.

--Editors: Mitchell Martin, Faris Khan

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net;

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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