The stock market is witnessing a surge in the popularity of 0DTE options, which now account for a staggering 50% of option volume across the S&P 500 index. It is noteworthy that the share of 0DTE volume in the S&P 500 index has doubled in just two years, reflecting the growing appetite for high-risk trading strategies.
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Zero Days to Expiration (0DTE) are option contracts that expire on the same day they are entered into. When an option reaches this stage, there is not much time left to exercise the right to buy or sell the underlying asset. The window is small, and the move the trader is planning must happen quickly. Are they profitable? Selling and buying options zero days before expiration can be extremely profitable, but at the same time, it is a gamble with incredibly high stakes.
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