0DTE
What Are 0DTE Options?
By Hamza Hamed · Published · Updated · 3 min read
Short answer
0DTE stands for zero days to expiration — options that expire at the end of the same trading day. Because almost no time remains, their prices react sharply to small moves in the underlying and lose extrinsic value rapidly. That speed makes 0DTE options one of the highest-risk ways to trade, and position sizing becomes the most important decision.Why 0DTE options exist
SPX now lists expirations every trading day, and SPY and QQQ offer frequent expirations too. That means on any given day there is an expiration available, which made same-day trading widely accessible.
Why they move so fast
Gamma
Gamma measures how quickly an option's delta changes. Near expiration, gamma for at-the-money options becomes very large. A few points in SPX can turn a cheap out-of-the-money option into an in-the-money one — or the reverse.
Theta (time decay)
Extrinsic value must reach zero by the close. With hours left, decay is steep. If price doesn't move in your direction quickly, the option can lose value even when the market is flat.
Implied volatility
Changes in implied volatility around news or sharp moves can shift premiums quickly, adding another source of variability.
Cheap is not the same as low risk
A 0DTE contract may cost very little, which makes it tempting to buy many. But the probability that a far out-of-the-money contract finishes worthless is high. The relevant question is not "how much does it cost?" but "how much am I willing to lose if this goes to zero?" — and the answer should determine size. See how to size an options trade.
Process before speed
- Know the levels before the open.
- Define the trigger and the invalidation.
- Assume the full premium can be lost and size accordingly.
- Set a daily loss limit and stop when it's hit.
- Avoid revenge trades after a loss — see why traders overtrade.
Common mistakes
- Holding a 0DTE position without a defined exit because ‘it can come back’.
- Oversizing because premiums look cheap — small premiums can still go to zero in minutes.
- Trading the open without a plan for volatility around economic releases.
Risk considerations
0DTE options can and frequently do expire worthless. Selling 0DTE options can produce losses far larger than the premium collected. They are not appropriate for everyone.
Frequently asked questions
Are 0DTE options gambling?
They can be used that way, which is why process and sizing matter. Without a defined plan and risk limit, 0DTE trading becomes speculation on noise.
Which tickers have 0DTE options?
SPX has daily expirations; SPY and QQQ also have frequent expirations. Availability can change, so check your broker.
Primary sources
About Hamza Hamed
Hamza Hamed is the founder of HamedTrades and creates educational content about trading, options, SPX, market analysis, position sizing and risk management.
Learn more about Hamza Hamed