Property Derivatives

Tradition Property

  • Commercial Property Derivatives Broking UK, Europe, North America and Asia Pacific
  • Residential Property Derivatives Broking UK and US*
  • Funded Notes
  • Daily Price Report
  • Weekly Funded Note Reports
  • Monthly Risk & Manage Property Derivatives Newsletter
  • Historic Forward Curve Data
  • Host of “Workshops: PROPERTY DERIVATIVE”
  • Consultancy relating to setting up to trade Property Derivatives
  • The Tradition Property Volume Survey showed the market has traded £27.5 billion ($41 billion or 30 billion euros) between market start 2004 and end of 2008.

Commercial PD

  • Trades use IPD or NCREIF (US) indices.
  • The UK, Germany, France, Switzerland, US and Canada are all trading. Demonstration trades have taken place in a few other markets, too.
  • Most commonly, deals take place at the All Property level (a basket of Retail, Industrial and Office) but sector deals do feature.
  • The deal format was an exchange of floating rates: the chosen property index in exchange for interest rate. However, now we use fixed/float swaps on the chosen index and as such the prices are expressed in “total return format” (ie, -9.25% or +2.25%, etc).
  • The deal size range is 5mio (small), 15 to 25mio (average) and 100mio and above (large).
  • The markets trade out one through three years commonly and five years or more on occasion.
  • Banks, pension funds, insurance companies, real estate funds, hedge funds and some property companies use the market.

Residential (Housing) PD

  • Trades use HPI and Radar Logic indices.
  • UK and US trade residential PD.
  • Most commonly deals take place at the All UK or All US level (a basket of all the regions) but regional deals do feature.
  • The deal format is a fixed/float swaps on the chosen benchmarker and the prices are expressed as percentage change
  • The deal size range is 5mio (small), 15 to 25mio (average) and 100mio and above (large).
  • The market trades out three years commonly and out as far as 25 years on occasion.
  • Banks are the biggest users of residential derivatives.

For more information, please call our property derivatives headquarters or email property@tradition.com.

Bloomberg messenger ID: Tradition Property

*Futures execution via TFS Derivatives Corporation, Member NFA. Trading of futures, securities, options and other derivative instruments entails significant risks which can result in substantial financial loss. Such risks should be fully understood prior to trading.


Contacts

London: +44 20 7198 1500