The Rise of 0DTE Options Trading in Index Markets
The proliferation of Zero-Days-to-Expiration (0DTE) options has reshaped short-term trading, offering unparalleled capital efficiency and eliminating overnight risk. Nearly half of the S&P 500 Index (SPX) trading volume now involves contracts with less than five days until expiration, with 0DTE options leading the charge.
This high-velocity market concentrates volatility and options pricing dynamics into mere minutes, demanding precision and discipline. Traders must leverage structural benefits like cash settlement and preferential tax treatment, alongside proprietary technical setups, to navigate this high-stakes environment effectively.