Insurance companies and commercial banks can create portfolio (mortgage) insurance (downside risk protection), risk mitigation strategies through portfolio hedges, and receive diversification through a new financial product. Companies could offer more formal kinds of equity insurance policies and use the derivatives to manage the risk they have taken on for the price of a premium.

Foreign investors can enter the U.S. commercial real estate market through a low cost instrument, have unregulated (tax) access to real estate markets, create global real estate synthetic portfolios, and have the ability to mix-and-match with other derivative products.

Real estate portfolio managers benefit through low cost allocation to real estate by property type and geographic location, portfolio hedge in down markets and portfolio yield enhance through property type and geographic location selection.

Real estate developers can hedge development risk by development period, product type and geographic location.

Accredited investors can create personal portfolio insurance, real estate property type and geographic portfolio diversification and thus optimize their portfolio concentration and exposure, while enhancing their yields. Futures and options could offer investors exposure to residential real estate markets without the bother of owning homes or collecting rent.

Individual Investors: Those kinds of derivatives could help homeowners protect their equity from the dangers of a bursting real estate bubble, or any kind of price decline in their market. Homeowners already have fire or storm insurance to protect them against losses, why not protection against losses from home price decreases?