What Is Fixed Time Trading? How FTT Works, Step by Step
A clear guide to Fixed Time Trading, also known as binary options: how a trade works, how the payout is calculated, a numeric example and the main risks.
In this article
Fixed Time Trading, often shortened to FTT, is one of the simplest ways to trade price movements. You do not buy the asset itself. Instead, you make a prediction about its price at a fixed moment in the future. Many people know this type of trade by another name: binary options.
In this guide you will learn how a fixed-time trade works, how the payout is calculated, what happens in a draw, and how FTT compares with traditional trading. You will also learn about the risks. They are real, and you should understand them before you trade with real money.
What Fixed Time Trading means
In a fixed-time trade, you answer one simple question: will the price be higher or lower than the opening price when the trade ends?
- If you think the price will be higher, you choose Buy.
- If you think the price will be lower, you choose Sell.
Before you open the trade, you also choose two more things:
- The amount you want to invest. At Bitvyl, the minimum is US$ 1 per trade.
- The duration of the trade. At Bitvyl, a trade can last from 3 seconds to 4 hours. You can also pick an exact expiration time, at least 30 seconds ahead.
When the time ends, the trade closes automatically. You do not need to close it yourself. The result depends only on one thing: the price at expiration compared with the price at opening.
Why it is widely known as binary options
The word "binary" means "made of two parts". A fixed-time trade has two main outcomes: your prediction is correct, or it is not. You also know the possible profit and the possible loss before you open the trade.
Because of this yes-or-no structure, many traders and websites call these trades binary options. When people search for "binary options", they are usually looking for this exact type of trading. At Bitvyl, we prefer the name Fixed Time Trading because it describes the most important feature: every trade has a fixed end time. You can read more about the two names on our binary options page.
How the payout works
The payout is the percentage of your investment that you receive as profit when your prediction is correct. It is shown on the screen before you open the trade.
At Bitvyl, the payout can reach up to 92% on selected assets. It is different for each asset, and it can change during the day. When you open a trade, the payout is locked. It will not change for that trade, even if the displayed payout changes a minute later.
There are three possible results:
| Result | What happens to your money |
|---|---|
| Correct prediction | You get your investment back plus the profit from the payout |
| Wrong prediction | You lose the amount you invested in that trade |
| Draw (closing price equals opening price) | Your investment is refunded |
A simple numeric example
Let us use an example with simple numbers. It is only an illustration.
The EUR/USD price is 1.08500. You think the price will rise in the next 5 minutes. You choose Buy, invest US$ 10, and the payout shown is 92%.
- The price rises. After 5 minutes, the price is 1.08512. Your prediction was correct. You receive US$ 19.20. That is your US$ 10 back plus US$ 9.20 profit.
- The price falls. After 5 minutes, the price is 1.08490. Your prediction was wrong. You lose the US$ 10.
- The price does not change. After 5 minutes, the price is exactly 1.08500. This is a draw. Your US$ 10 is returned.
Two points in this example are very important.
First, the size of the move does not matter. A very small move in your direction pays the same as a large move. A very small move against you loses the full amount.
Second, your profit when you win (US$ 9.20) is smaller than your loss when you lose (US$ 10). This means you must be right more than half of the time just to break even. We explain this math in detail in our article on risk management and position sizing.
FTT compared with traditional trading
Traditional trading usually means spot trading or CFD trading. In spot trading, you buy the real asset, for example a currency or a coin, and you sell it later. In CFD trading, you do not own the asset. You trade a contract on the price difference, often with leverage.
Here is a neutral comparison:
| Feature | Fixed Time Trading | Spot trading | CFD trading |
|---|---|---|---|
| Do you own the asset? | No | Yes | No |
| What decides the result? | Only the direction at expiration | How much the price moves before you sell | How much the price moves, multiplied by leverage |
| Loss per trade | Known in advance: the amount invested | Depends on how far the price falls | Can grow quickly because of leverage |
| Profit per trade | Known in advance: the payout | Not fixed | Not fixed |
| When does the trade close? | Automatically at expiration | When you decide to sell | When you decide, or when a stop is reached |
Each method has strengths and weaknesses. FTT is easy to understand. The risk of each trade is known before you open it, and you can start with small amounts. On the other hand, the profit is limited and smaller than the possible loss. You can also be right about the direction but wrong about the timing. For example, the price may rise, but only after your trade has already expired.
Spot and CFD trading allow larger profits when a move is big. But they also need more decisions, such as when to exit and where to place a stop. With leverage, losses can grow fast.
The risks you must understand
Fixed Time Trading is simple, but simple does not mean safe. Before you trade with real money, make sure you understand these risks:
- You can lose the full amount of every trade. There is no partial loss when the prediction is wrong.
- The math works against you. Because the payout is below 100%, you need a win rate above 50% just to break even.
- Speed creates emotion. Short trades give results fast. This can push you to trade too often, or to try to win back a loss right away.
- Timing risk. A correct idea with the wrong expiration time is still a losing trade.
- The platform is the counterparty. In fixed-time trades, Bitvyl is the counterparty to clients' trades. You should know this before you trade.
Trading involves high risk. Only trade with money you can afford to lose.
A careful start makes a big difference. Practise with virtual money first. Choose one asset and one expiration time, use a small fixed amount, and write down every trade. Our guide on how to use a demo account gives you a step-by-step practice plan. If you plan to trade on weekends, also read about OTC and real market hours.
Key takeaways
- Fixed Time Trading means predicting if the price will be higher or lower at a fixed end time.
- It is widely known as binary options because there are two main outcomes.
- The payout is shown before you open and is locked for that trade. A draw returns your money.
- Only the direction matters, not the size of the move.
- Your win is smaller than your loss, so you need more than 50% correct trades to break even.
- The risk is high. Practise first and only trade money you can afford to lose.
The best way to understand Fixed Time Trading is to try it without risking real money. Open a free demo account with US$ 50,000 in virtual funds. You get the same quotes and tools as a real account, so you can test your ideas and learn how each trade behaves before you decide on your next step.
