Hedgelets: A Bet on Home Prices

HedgeStreet Inc., which lets investors trade a kind of derivatives online, is now letting participants “hedge” or speculate on the direction of home values in major U.S. real estate markets. The new Housing Price Hedgelets are tradable as both Yes/No and Variable contracts with three-month and six-month durations and are benchmarked against the National Association of Realtors reported median sales price of existing single-family homes in Chicago, Los Angeles, Miami, New York, San Diego and San Francisco. “For most Americans, their home is their single largest investment and, as such, the desire to reduce risks surrounding that asset is important,” said John Nafeh, HedgeStreet’s chief executive officer. “Housing Price Hedgelets provide a unique way for them to hedge against depreciation in the value of a home, or conversely, speculate on the degree to which housing prices will appreciate.”