My colleague Peter Coy offered a novel way to hedge against a collapse in housing prices (see below). There’s another way: There’s an online futures exchange, HedgeStreet.com, that allows you to bet on the direction of housing prices in six U.S. cities: New York, Los Angeles, Miami, Chicago, San Diego and San Francisco (the site is a real-working futures exchange, regulated by the Commodity Futures Trading Commission). How? You buy or sell small futures contracts (called hedgelets) that effectively allow you to bet that housing prices in one of the six markets will fall—or rise further, if you care to bet that way—over the next three to six months. So someone living in, say, San Diego, could buy these contracts as a way to offset any loss in value they incur in their own home. Only problems is the short nature of the contracts. It could get expensive real quick to continue renewing your contracts if home prices continue to remain strong. But that’s the beauty of speculating, right?

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