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Following the launch of housing-related futures and options earlier this year, the Chicago Mercantile Exchange is moving ahead with plans to launch futures and options on commercial real estate as well.
The CME has teamed up with Global Real Analytics, a San Francisco- based commercial real estate index provider, to launch the derivative products, based on the GRA commercial real estate indexes, in early 2007.
These are the first derivative products, according to the CME, that allow investors and speculators to protect their investments or gain an exposure to the U.S. commercial real estate sector.
"Commercial real estate represents a significant asset for many institutions and these products will create a liquid and transparent market that can be used by these market participants to help reduce risks associated with holding real estate assets," Rick Redding, CME managing director for products and services, said in a CME release.
Ten quarterly contracts, to be settled on a...