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Yeah! It's another way of saying the same thing; one way is kind of using "betting" jargon, one way is using "insurance" jargon. In a sense, a fire insurance policy is your bet that your house WILL burn down; and unless you're an arsonist, you hope to lose the bet.

If you were concerned about a price drop in your own house; you would short these futures, appropriate for your area, and such a "bet" would increase in value if housing in your area declined in price. The decline in one instrument would be offset by the rise in the other, as your short bet would incr. in value as housing fell. Taken together, and put on in the proper proportions, the combination of the two items would maintain a constant value. A hedge, for sure, as you said. You wouldn't actually be shorting "your own house", of course, but a proxy index. I was being a little flippant, as I am wont to be.

Speaking as a 30+ year futures trader, former broker, former floor man, published author on futures and options trading, these contracts have a whole lot of problems.

Without going into a lot of technical details, just please consider a futures market in general. Arbitrarily, take wheat or Eurodollars.

Why are these markets successful? Because there exist both ''natural'' longs and ''natural'' shorts in these markets. The wheat grower is a natural short, because (if he's a brain in his head) he'll use the markets to lock in a price for his crop. The miller and the bread baker will use the markets to lock in their cost of input product. The specs and the funds grease the wheels (insure liquidity) for such markets.

The principal problem with housing/real estate index futures is that there is only one natural group of players, in theory: those who own homes in the index-covered areas. These are natural shorts.

Who are the natural longs? Damned if I know. Certainly not builders, who wouldn't fork over a dime to develop some land unless the numbers had already crunched correctly beforehand. Certainly not bankers or mortgage lenders, who don't give a warm damn about housing/real estate per se, only about the spreads that can be earned by lending in this area, and in ANY are more likely to use such markets on the short side to limit their exposure just in case housing/real estate should undergo a bit of slump at some point.

There are **no** ''natural'' longs in these markets, which means directly that, unless there comes to be a huge spec interest on the long side, these markets are absolutely and utterly doomed to fail.

I stand by every word of this post, and will gladly wager anyone here a cold beer against a $50 bill that, absent rampant spec by the funds, these markets don't exist for 3 years without MAJOR contract rewriting...and probably not even then.