The real estate derivatives market is a lot like the younger brother of the most popular kid in school. Those who know him say he’s just like his big brother, merely a little younger, less mature and not as popular in his own right. You’d like to have the popular brother at your party but you know he isn’t interested, so you wonder if inviting the younger one would give the party the same cool appeal it’d have if the older one came — but you worry that the party could be ruined by an immature little brother who isn’t the real thing. And a few people have told you they’ve had a bad experience with the younger brother, or know someone who has, so maybe better to stay away.

Like the younger brother, property derivatives gain much of their appeal from the fact that they are a way to access the characteristics of real estate without having to acquire the real thing. But also like the younger brother, deri