0DTE (Zero Days to Expiration) is a term used in options trading that refers to contracts that expire today. These ultra-short-term options have grown rapidly in popularity among day traders and income-focused investors due to their unique risk-reward profile.
🔍 What Does 0DTE Mean in Options Trading?
When you hear “0DTE,” you’re talking about options contracts that are set to expire at the end of the current trading day. These could be:
- SPY or SPX weekly options expiring today
- Same-day expiration calls/puts on high-volume tickers
Because there’s no time left on the clock, these options are highly sensitive to market moves—which is why traders love them.
⏳ How Do 0DTE Options Work?
0DTE options operate just like any standard option, but all their value is tied to intraday price movement and implied volatility. Traders typically:
- Enter positions in the morning
- Aim to exit before market close
- Use them for scalping, hedging, or premium capture
⚖️ Pros and Cons of 0DTE Trading
Pros:
- High reward potential in short time
- No overnight risk
- Frequent income opportunities (some ETFs like SPY offer daily expirations)
Cons:
- Extremely high risk
- Requires fast decisions and experience
- Easily impacted by news, volatility spikes
🧐 Who Trades zero-DTE Options?
zero-DTE is popular with:
- Day traders who want fast profits
- Options income traders selling premium (Iron Condors, Credit Spreads)
- Scalpers playing momentum before expiration
It’s not ideal for beginners without strong risk management.
🚀 0DTE Strategies You Should Know
- Iron Condors: Short both puts and calls, with protection
- Credit Spreads: Sell high-probability options with limited risk
- Directional plays: Buy ATM calls/puts on momentum
- Scalp volatility: Use high IV to sell options into time decay
🔄 Should You Trade 0DTE?
If you’re asking “Should I trade 0DTE options?”—start small or paper trade first. These are not for the faint of heart, but with the right approach, they can be powerful income tools.