Friday, May 04, 2007
Could other options products sold to householders stop this madness in the Housing Markets
Risk Glossary: Option Spreads
It seems to me that if someone buying a mortgage had "price fall" protection, we could stop banks and other lenders being predatory.This can be achieved with a variety of Exotic Options - e.g. a "Costless Collar".
It is (I believe and I may be wrong) an each way bet on your house price. It prevents you making money on your house in the good times, but at least you will keep it in the bad times. This would be a rectifier (engineering term) in effect.
Posted by lvmreader @ 03:54 AM (122 views) Add Comment
1 Comment
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1. doomwatch said...
Long put the fella, unless you belive the hype that prices can somehow rise even further, the long stradle will
be a bit dearer.