Dealers launch synthetic indices on ARMs

Dealers have developed a family of indices on the hybrid adjustable rate mortgage (ARM) market. The Hybrix indices are cash-settled forward contracts referencing mortgages issued by Fannie Mae and Freddie Mac, and will start trading on March 1.

"This is the first time in the history of the ARM market that you can short ARMs. So, for those investors who want to hedge their books and for those who have a negative view on the ARM market, you now have the ability to express that view,” said Sami Bous

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