I had to scratch my head on this one:
It was probably only a matter of time: stock options, the commodities future market, index options — and now real estate index options. “Place your bets” is an accurate description of what you're doing — it's very high-stakes gambling. $67,000 for a single Los Angeles real estate contract?! It's high minimum bet, as well!
It's touted as a hedge against falling real estate prices in a particular area, implying that homeowners in one of the areas covered by some of the contracts could buy puts to protect themselves against loss of equity. Man, that's risky! And if the market doesn't tank immediately, you have an expiring asset on your hands, meaning it loses value the closer you get to the expiration date.
I suppose that this is just another clever way to part hapless homeowners from their money.