The first long-dated derivatives on US residential property were traded this week. Financial Times


Jonathan Reiss, principal at boutique trading firm Analytical Synthesis, sold short the national S&P/Case-Shiller home price index four and five years from now, with Goldman Sachs on the other side of the trade.

Reiss will profit if expectations for the index fall. Goldman’s pricing indicates that the bank expects the index to be almost at the current level in five years’ time.

The multimillion-dollar deals were the first to have maturities as long as five years. They are also the first in the privately negotiated, or over-the-counter, markets.

The trades were brokered by Tradition Financial Services, the leading broker for CME’s housing contracts, and CB Richard Ellis GFI, the most active broker in the UK property derivatives market.