Hurricane Isaac battered the US Gulf Coast this week, leaving widespread damage and a potentially hefty bill for insurance companies. But insurers who hedged their exposure to the region through the use of hurricane derivatives would have weathered the storm better than others.

US derivatives exchange CME Group offers binary options contracts that give both hedgers and speculators the chance to bet on the ferocity of the US hurricane season. A popular derivative is the CME's Seasonal contract, which belongs to the group's proprietary Hurricane Index suite of products.