Trading term

What is 0DTE options?

0DTE stands for zero days to expiration: an option that expires on the same day it's traded. S&P 500 index options now expire every weekday, so there's a 0DTE contract every trading day, and they make up most of all S&P 500 options volume.

Most of an option's price pays for time. A 0DTE option has only hours left, so it's cheap, and a small move in the index can multiply its value or wipe it out by the close. That's why same-day options are popular with traders betting on one day's move, and with sellers collecting premium on days they expect to be quiet.

S&P 500 (SPX) options gained Tuesday and Thursday expiries in 2022, which completed the week. Since then same-day contracts have grown to well over half of SPX options volume. XSP, the mini-SPX, is a tenth of the size. Both settle in cash at the 4 p.m. close.

For example

At 10 a.m. the S&P 500 is at 7,000 and a call with a 7,070 strike, expiring at 4 p.m., costs a few dollars. If the index closes at 7,100, the call is worth 30 points. If it closes at 7,050, it expires worthless.

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Why it matters to you

Same-day options are priced off the move the market expects that day. If the index moves less than that, buyers lose and sellers keep the premium. If it moves much more, sellers can lose many times what they collected in a single afternoon.

⚠ Cheap isn't the same as low risk

A 0DTE option costs little, so it feels like a small bet. But most expire worthless, and the bid-ask spread is a big slice of a cheap option's price. Selling them is riskier still: without a protective option, the loss has no limit.

Frequently asked questions

What does 0DTE mean?

Zero days to expiration. A 0DTE option expires on the day you trade it. S&P 500 index options expire every weekday, so any trading day can be a 0DTE day.

Do 0DTE options make money?

On average, not for buyers. Same-day options have usually priced a slightly bigger move than the index delivered, so buyers get back less than they pay before trading costs, and costs take more. Sellers win most days but can take large sudden losses.

Read the full guide

Derivatives0DTE Options: Who Actually Makes Money? Every Day Since 2022, TestedDo 0DTE options make money? We priced every same-day S&P 500 option since May 2022 off Cboe's VIX1D and checked who won: buyers or sellers.10 min read

Related terms

Call optionA call option is a contract giving the buyer the right — but not the obligation — to buy an asset at a fixed 'strike' price before a set expiry date. Call buyers are betting the price will rise; their risk is capped at the premium paid, while the potential profit is open-ended.Cash-secured putA cash-secured put is an options strategy where you sell a put option while setting aside enough cash to buy the stock if you're assigned. You collect the premium as income; in exchange, you agree to buy the stock at the strike if it falls there. It's a way to get paid to buy a stock you want at a lower price.Covered callA covered call is an options strategy where you own 100 shares of a stock and sell a call option against them. You collect the premium as income; in exchange, you cap your upside at the strike. It's a popular way to generate income on shares you're happy to hold or sell.DeltaDelta measures how much an option's price moves for each $1 change in the underlying. A delta of 0.60 means the option gains about $0.60 if the stock rises $1. It ranges from 0 to 1 for calls (0 to −1 for puts) and doubles as a rough probability the option finishes in the money.
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