Radar Logic announced today that volumes in RPX property derivatives had surged in response to the Treasury Department's announcement of its plans for the two GSEs. As a result, Radar Logic now predicts that volume in its first year of trading could exceed $2 billion, which the company believes makes RPX the fastest growing property derivative market segment.
Radar Logic President and CEO Michael Feder said, "Volume this morning surged in immediate response to the Government's policy announcement regarding Fannie Mae and Freddie Mac. Clearly investors have begun trading RPX as a way to effect strategies regarding the housing market in light of economic and policy actions. We believe RPX has begun to trade as an independent asset class with strong two-way flow and increasing liquidity."
The Company does not release specific trading information, but did indicate that the interest was from a broad range of end-users and seemed to be well balanced between optimists and pessimists. "This is a new market and it has taken some time for investors to become comfortable with liquidity and response," said Feder. "Clearly as of now we are seeing that comfort level translate into activity. Further, the forward curve that has developed as a result of the forward market has begun to tighten, suggesting some market expectation about improvement in housing."
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