0DTE

0DTE stands for zero days to expiration, options contracts that expire on the same day they are traded. They are defined by extremely rapid theta decay, peak gamma risk, and high intraday leverage.

0DTE trading became widely accessible after major exchanges introduced daily expirations on SPY, QQQ, and SPX. These contracts now account for a significant share of total index options volume.

Why they're attractive: An option's entire remaining time value decays within a single session. For sellers, this means maximum theta capture in minimum time. For buyers, small intraday moves in the underlying can produce large percentage gains.

Why they're dangerous: Gamma is at its highest for 0DTE options. Delta shifts rapidly on small moves. A $2 move in SPY can turn a "safely" OTM position into a large loss within minutes. There is no time to wait for the trade to recover.

Example: You sell a 0DTE SPY put at the $510 strike for $0.30 at 9:40am. By 2:30pm, SPY is at $513 and the put is worth $0.02. You buy it back for a $28 profit per contract. Alternatively, if SPY drops to $507, your put is now worth $3.00, a $270 loss per contract on what started as a $30 trade.

Who uses them: Intraday premium sellers running theta harvesting strategies, and directional traders seeking leveraged exposure to same-day catalysts (FOMC, CPI, earnings).

Key risk: Gap moves at the open or on news can instantly push 0DTE positions deep ITM with no time to recover. Always use defined-risk structures (spreads) and appropriate position sizing.

Related terms: Theta, gamma, pin risk, OPEX, expiration date, weekly vs monthly expiry