Derivatives exchange Nadex plans to offer bitcoin binary options to customers in the US next month, if its filing to register the options with the country's commodities regulator is accepted.

Nadex will offer daily and weekly bitcoin binary options contracts, taking prices from the bitcoin price index published by TeraExchange, a derivatives trading platform. Both Nadex and TeraExchange are regulated by the US Commodity Futures Trading Commission (CFTC).

The exchange is one of three 'designated contract markets' offering binary options in the US that are subject to CFTC oversight. It is owned by IG Group, a derivatives trading firm that is listed on the London Stock Exchange.

Binary options are a type of derivative that allows traders to gain a fixed amount of profit if they are correct about the outcome of a particular proposition.

For example, the proposition might be that the share price of a particular company may be above $9.36 per share at 2:30pm on a certain day. Binary options are also known as "all-or-nothing options" or "fixed-return options", according to the CFTC.

Nadex chief executive Timothy McDermott said in a press release that his firm's bitcoin binaries will give traders a way to gain exposure to bitcoin's volatility while limiting risk. He also said Nadex was offering the binaries in response to customer demand.

Nadex's corporate parent, IG, already offers bitcoin-linked products through binary options and contracts for difference (CFD). The firm offers daily, monthly and weekly binary options. It also sells a number of bitcoin CFDs.

A CFD is a derivative that allows traders to gain exposure to movements in asset classes, such as stocks, without owning the underlying asset. A company called First Global Credit offers CFDs linked to blue-chip technology stocks that can be bought with bitcoin.

Nadex's offering is for US customers while IG's products are for customers from the rest of the world, IG's public relations manager Chris Alfred said.

IG offered bitcoin binaries last April, taking prices from Mt Gox, according to trade publication Forex Magnates. Those binaries were discontinued a month later. The firm did not explain why the binaries were discontinued, when asked. The firm said only that the bitcoin binaries were relaunched in October because of customer demand.

"We can see from search terms ... that demand to speculate on bitcoin is gathering momentum," Alfred said.

According to the CFTC, it has received "numerous complaints" about fraud linked to binary options trading platforms. It advises the investing public to be wary of identity theft, manipulated trades and inability to recover funds when dealing with unregulated binary options brokers.

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