What They Are and How to Trade

Zero-day options are gaining traction among active traders looking for quick profits and high volatility. But with speed comes risk. Learn how 0DTE options work, where to trade them and what to watch out for, so you can decide if these fast-moving contracts fit your strategy.

What are 0DTE options?

0DTE options stands for “zero days to expiration” options. These are options contracts that expire on the same day they’re traded.⁽¹⁾ That means traders have just hours — or even minutes — to act before the option expires or is exercised.

Zero-day options are most commonly associated with index options like SPX, which now offer expirations five days a week. Because of their ultra-short time frame, 0DTE options are favored by traders seeking to capitalize on rapid intraday price movements. But with their fast pace comes a need for precision, as these contracts can swing in value dramatically within minutes.

How to trade 0DTE options

Trading 0DTE options requires a streamlined setup and a strong grasp of fast-paced trading strategies. Below is a step-by-step overview of the process, from account creation to execution planning.

1. Choose a broker. An options trading brokerage that supports same-day expiration options on major indexes, such as SPX. Key features to consider include:
   • Real-time data access
   • Fast and reliable order execution
   • Platform stability under high-volume conditions
2. Apply for options trading approval. Most brokers require users to apply for options trading and be approved for Level 2 or higher before granting access to trade 0DTE contracts.
3. Fund the account. Ensure adequate capital is deposited to cover premiums, potential losses and margin requirements. SPX 0DTE options under $200 may be available depending on volatility and chosen strikes.
4. Research options strategies. Effective 0DTE trading relies on selecting strategies tailored for rapid time decay and intraday price movements. Common options trading strategies include iron condors, vertical spreads and directional trades.⁽¹⁾

Where you can trade 0DTE options

Several online brokers offer access to 0DTE options, each with distinct features and fee structures. This table provides a comparative overview:

Risks of 0DTE options

Options trading is inherently riskier than many other forms of trading, and 0DTE options amplify that risk due to their extreme time sensitivity. Risks such as time decay, volatility, liquidity constraints, assignment risk and leverage exposure all apply — but are heightened with 0DTE options, which expire within hours. These leave little room for error and are generally suited only for experienced traders.

• High time decay (theta burn)

  One of the most immediate and severe risks is accelerated time decay, also known as theta burn. With no time premium left by market close, out-of-the-money contracts rapidly lose value as the day progresses.⁽²⁾ Even a flat market can drain the entire premium within hours. This makes timing absolutely critical.

• Intraday volatility and greeks sensitivity

  0DTE options are highly sensitive to small price changes, especially due to the behavior of deltas and gammas. Delta can change rapidly with price movement, affecting your position’s directional exposure. Gamma, which measures the rate of change of delta, spikes near expiration, making trades prone to large and sudden profit and loss swings.⁽²⁾ A small move in SPX, for instance, can shift a trade from profit to maximum loss in minutes.

• Total premium loss risk

  The risk of a complete loss of premium is significant. Since there’s no buffer for recovery, any incorrect directional bet — no matter how slight — can expire worthless by the end of the day. This is especially common for traders who buy out-of-the-money calls or puts, hoping for a breakout that never materializes.

• Liquidity and execution risk

  While at-the-money strikes often have tight bid-ask spreads, far out-of-the-money contracts can see wider spreads — leading to poor execution — and slippage, especially during fast market conditions.

• Dealer hedging and gamma instability

  Gamma exposure can also lead to unexpected price moves due to hedging dynamics. Because dealers hedge aggressively throughout the day, rapid repositioning can trigger sharp moves in the underlying asset, occasionally creating a feedback loop that accelerates price swings, a phenomenon that’s been observed in SPX index trading.

Popular underlying assets for 0DTE options trading

Most 0DTE options trading activity centers around highly liquid, broad-market indexes and exchange-traded funds (ETFs) that offer same-day expirations. These instruments provide tight spreads, deep volume and predictable volatility, making them ideal for short-term strategies.

• SPX (S&P 500 Index). The most actively traded 0DTE instrument, offering daily expirations and high notional value.
• QQQ (Invesco QQQ Trust). Tracks the Nasdaq-100, known for tech-driven volatility and quick intraday movement.
• SPY (SPDR S&P 500 ETF). Offers lower capital requirements than SPX while mimicking the same underlying index.
• NDX (Nasdaq-100 Index). Preferred by traders targeting concentrated exposure to large-cap tech.
• IWM (iShares Russell 2000 ETF). Focuses on small-cap stocks, ideal for traders seeking higher volatility plays.
• DIA (SPDR Dow Jones Industrial Average ETF). Tracks the Dow 30; less volatile than SPY or QQQ but still used for directional bets.
• XSP (Mini-SPX Index). One-tenth the size of SPX, cash-settled and ideal for smaller accounts wanting to trade SPX-like setups.
• VIX (CBOE Volatility Index). Offers exposure to market volatility itself. Used mostly for hedging or speculative plays, however, it is not ideal for traders starting in options trading.
• AAPL, TSLA (select large-cap equities). While not traditionally offered with daily expirations like indexes, some brokers provide near-daily expiries on highly liquid names like Apple (AAPL) or Tesla (TSLA).

Popular strategies for trading 0DTE options

While 0DTE options are structurally no different from other options contracts, their ultra-short time frame introduces unique tactical and psychological pressures. In theory, you can use any options strategy — but in practice, only a subset tends to work well in the high-speed environment of 0DTE options.

Because 0DTE options offer little room for error, traders tend to avoid overly complex or multi-leg positions that require long timeframes to play out. Instead, they often prefer strategies that respond well to intraday price movement, volatility shifts or rapid time decay.

Common 0DTE trading strategies

• Naked calls or puts. Provide simple directional bets on strong intraday movement.
• Credit spreads (Bull put / Bear call). Limited-risk strategies that benefit from time decay and price staying within a defined range.
• Iron condor. Traders aim to profit from low volatility by selling two credit spreads above and below the current price.⁽³⁾
• Straddles and strangles. Direction-neutral setups that bet on large intraday moves; risk increases without a strong price swing.
• Gamma scalping. An advanced intraday method where traders repeatedly adjust delta exposure to profit from short-term price volatility.⁽⁴⁾

Bottom line

0DTE options offer unmatched speed and flexibility for traders who can manage risk and act decisively. For traders exploring SPX 0DTE options under $200 or other short-term setups, understanding the mechanics and strategy behind zero-day options is essential. Always trade with a defined edge and clear limits.

Frequently asked questions

Why are 0DTE options popular?

0DTE options are popular because they offer immediate exposure to market movements with lower upfront costs due to smaller premiums and the potential for quick, leveraged gains. Additionally, the ability to enter or exit the market quickly allows the trader to potentially pocket a huge win or to protect themselves and their portfolios instantaneously.

What happens if you don’t exercise a 0DTE option?

If a 0DTE option expires in the money and isn’t exercised manually, it’s typically auto-exercised by the broker. If it expires out of the money, it becomes worthless.

Are 0DTE options risky?

Yes, 0DTE options are highly risky due to rapid time decay, sharp price swings and the potential for total premium loss within hours.

How much money do you need to trade 0DTE options?

There’s no official minimum to trade 0DTE options, but to trade them effectively and safely, many experienced traders recommend having at least $25,000 in your account. However, for the best use of 0DTE options, a higher budget is necessary. And finally, traders shouldn’t put all their money into one 0DTE option to alleviate the risk of losing the total budget.

Shane’s career started with the US Department of Defense where he performed research for 8 years. He then studied philosophy and became fascinated by the ways in which technology and finance can consolidate to impact the world’s socio-economic order. To date, he has written hundreds of articles with various insights into digital assets, trading, investing, and the ways in which technology can be used to further optimize the stock trading and settlement processes. His work has been featured in Yahoo Finance, Nasdaq, Bitcoin Magazine, Investing.com, Tokenist, and others. See full bio