From Quarterly to Quotidian: The Rise of Same Day Options Trading (0DTE)

Options are lauded for their versatility, offering investors a broad spectrum of tenors to express their viewpoints. From trading options that expire years into the future, like the SPX® options expiring in 2028, to the more recent phenomenon of zero days to expiration (0DTE), the landscape of options trading has evolved dramatically over time.

From Quarterly to Quotidian: The Rise of Same Day Options Trading (0DTE)

A Brief History Lesson

In 1973, an ambitious exchange began listing call options on a mere 16 stocks. Expirations were initially set quarterly, and as demand grew, monthly expirations became the norm. This meant same-day trading was limited to just a handful of days per year.

Fast-forwarding to 2005, the introduction of a.m.-settled SPX Weeklys options reshaped the game. This initiative allowed for more comprehensive risk management. Come 2016, the launch of Wednesday-expiring SPX Weeklys further diversified options trading, aligning with the expiration of VIX® Weeklys. By 2022, the market saw an SPX Weeklys option for every weekday, amplifying the opportunities for same-day trading. As of 2023, SPX 0DTE options trading constituted roughly 43% of average daily volume.

How Are Investors Navigating Same-Day Trading?

Recent data reflects a surge in interest for shorter-dated options trading. Investors are using them to manage exposure to key events, frequent premium sales, and implement a diverse range of risk/reward strategies.

Cboe data on SPX options provides a deeper insight:

  • The put/call ratio for same-day SPX options is almost equal, with puts slightly edging out calls. This stands in contrast to the average put/call ratio for all SPX options in the past year, which was 1.37.
  • Around 45-50% of volume is attributed to single-leg volume. However, this includes adjustments to open spread positions.
  • Of the SPX 0DTE trading that involves spreads, approximately one-third are vertical spreads, while the rest are more intricate trade structures.

The market has seen participation from a myriad of investors, ranging from institutional traders to the average retail trader. These strategies are enticing due to their elimination of overnight risks and their defined outcomes.

Interestingly, over 20 firms have an average daily volume in the thousands for options contracts. The trend also showcases market makers increasingly opting for options over futures for delta hedging.

From Quarterly to Quotidian: The Rise of Same Day Options Trading (0DTE)
Source: Cboe Global Markets data

Is the 0DTE Trend Here to Stay?

Comparing the 0DTE trend to the meme stock frenzy or the 2018 “Volmageddon” is like comparing apples to oranges. The meme stock craze and the volatility spikes in 2018 had distinct underpinnings and were not sustainable. In contrast, 0DTE trades are transient and reset at the end of each trading day.

Options trading has seen record-breaking volumes for three consecutive years, hitting the 10 billion mark in 2022. The uncertain geopolitical climate, marked events like the war in Ukraine, the reverberations of the COVID-19 pandemic, the renewed importance of interest rates, and the impending 2024 U.S. presidential election are reshaping hedging strategies.


The world of trading is ever-evolving. With changing market dynamics, trading strategies must adapt and evolve. As a committed market operator, we stand poised to offer market access, education, and state-of-the-art technological infrastructure. As the trend of 0DTE options trading continues, rest assured, we will be closely monitoring its trajectory.,This article is an original creation by If you wish to repost or share, please include an attribution to the source and provide a link to the original article.Post Link:

Like (1)
Previous August 15, 2023 3:08 pm
Next August 16, 2023 3:33 pm

Related Posts

  • Unraveling the SPX 0DTE Enigma: Beyond Volume to True Market Impact

    In the kaleidoscopic world of stock and options trading, there are few phenomena that have garnered as much attention as the Zero Days to Expiry options, or 0DTEs. With their explosive growth in popularity – rocketing from 5% of SPX® options volume in 2016 to a staggering 50% this August, they’ve ignited imaginations and sparked widespread debate. The question on everyone’s lips: Is the dramatic surge in 0DTEs warping the very fabric of the markets? Let’s delve deep and separate the chaff from the grain. Understanding Gamma Hedging: Before we…

    September 11, 2023
  • Dancing on the Razor’s Edge: Investor Caution Amidst a Surging Stock Market

    Hope for the best. Prepare for the worst. This old adage seems to be the mantra for the options market as the S&P 500 index continues to pirouette precariously on the brink of record-high territory. The dance is as thrilling as it is nerve-wracking, mirroring the collective heartbeat of big investors who are keeping a wary eye on the market’s movements. Inflation, the invisible puppeteer pulling on the strings of the economy, appears to be cooling. This suggests that the Federal Reserve may take a step back from more aggressive…

    July 3, 2023
  • A 5-Step Guide to Options Trading Mastery: From Idea Generation to Post-Trade Monitoring

    Options trading has become an increasingly popular investment avenue for both new and seasoned traders. The versatility and complexity of options provide a wide array of opportunities but can also pose certain challenges. This guide is designed to help traders at any level discover their next step in the options trading journey by breaking down the process into five manageable steps. Step 1: Get Started Understanding the basics of options trading is a fundamental starting point. Traders must acquaint themselves with the nature of options and how they can be…

    August 7, 2023
  • Navigating Uncertainty: Harnessing Market Volatility through Options Strategy

    As the adage goes, the only certainty in life is uncertainty. This has been brought to stark relief in recent events that have caught the world by surprise. To many investors, these events have highlighted the fact that we live in an increasingly unpredictable world, where seemingly unlikely scenarios can become reality, with potentially significant consequences for the global economy and financial markets. Consider the recent event where the mercenary Wagner Group seemed to be on the verge of staging a revolt against Vladimir Putin, one of the world’s most…

    July 3, 2023
  • Mastering Rollover Options: Extending Your Trades and Managing Risk

    Rollover Options refer to the process of closing an existing options contract and opening a new one with a later expiration date while maintaining the same underlying asset and strike price. This strategy is typically used by options traders to extend the life of a trade that may require more time to become profitable or to manage risk in their options portfolio. How to use it: Monitor your existing options position: Keep an eye on the performance of your options contract, taking note of its time to expiration and any…

    May 7, 2023
  • Strategic Option Rolling: Essential Techniques for Adaptive Traders

    Introduction: Options trading can be a versatile and potentially lucrative way to participate in the financial markets. One of the key strategies that experienced traders often employ is “rolling” options. This blog post will provide a comprehensive overview of rolling options, covering essential aspects that traders should know, including the meaning of rolling options, reasons for using this strategy, and specific examples of rolling different types of options. What does it mean to roll options? Rolling options is a strategy that involves closing an existing options position and simultaneously opening…

    May 7, 2023
  • Optimizing Yields in a Shifting Landscape: A Bond and Options Blueprint

    The investment landscape is evolving, with bonds now nearing a point where they might just outshine stocks. As we step into this new era, many investors are understandably looking for ways to boost their yield without substantially increasing their risk. If you are among this group, there’s an innovative strategy you might want to consider. Bonds: The New Attraction Many investors today are reveling in returns of 5% or even higher from their money-market funds or short-term government bonds. This is a pleasant shift, especially when you consider the 10-year…

    August 24, 2023
  • What are Zero Days to Expiration (0DTE) Options and How They Work?

    Zero Days to Expiration (0DTE, or ZDTE) Options refers to options contracts with no time value left i.e. their expiration date is the next trading day. 0DTE options are typically used by traders who want to take advantage of expected price movements in the underlying asset in the very short term. The price of an option is made up of two components: intrinsic value and time value. Intrinsic value is determined by the difference between the current price of the underlying asset and the strike price of the option. Time…

    February 3, 2023
  • Navigating the Unpredictable: Index Options Strategies for the Rest of 2023

    Introduction As the world keeps changing, the capital markets reflect this dynamic ebb and flow. In 2023, while the U.S. equity indexes have shown remarkable resilience, there’s an underlying truth that remains unshaken: “Buy protection when you can, not when you’re forced to.” As we step towards the close of 2023, it’s imperative to reevaluate your investment strategy, especially concerning index options. The Cost of Protection: Understanding the Basics In the world of options, the cost of protection is often overlooked when the markets are calm. The catch is that…

    August 8, 2023
  • An Introduction to Free Options Strategies: Unlocking the Potential of Options Trading for Beginners

    Introduction Options trading offers a unique way for investors to diversify their portfolios and potentially maximize profits. This blog post aims to introduce the concept of options, the reasons to invest in options, the advantages and disadvantages of options trading, how to get started with options, and common options strategies for beginners. We will also discuss what options can be used for, who can benefit from options trading, and provide a conclusion to tie everything together. What are Options? Options are financial contracts that give the buyer the right, but…

    April 26, 2023

Leave a Reply

Your email address will not be published. Required fields are marked *