Activity in a novel interest rate futures contract has been picking up in recent weeks as investors try to insure against a surprise move by the US Federal Reserve, in spite of a broad consensus that the outlook for interest rates is steady.

Binary option contracts, listed on the Chicago Board of Trade since July, enable investors to bet on the possible outcomes from a Federal Reserve policy meeting – a change or a steady Fed funds rate – with a pay-out fixed, essentially, at $1,000 per contract for a successful bet or zero otherwise.