Why Are 0DTE Options So Popular and How Risky Are They?

A few years ago, an option that expired the same day was a curiosity traded on Fridays. Now it is the single biggest slice of S&P 500 options trading. Its popularity is easy to understand; its risks are easy to underestimate.

What people on X are asking

In May 2024 a market data account noted that 0DTE options accounted for almost 50% of all SPX options volume. By January 2025 a portfolio manager shared a chart showing 51% of S&P 500 index options volume came from 0DTE contracts, and in March 2026 another account posted that over 60% of S&P 500 options are now 0DTE. Cboe's own figures, below, confirm the trend and put the July 2026 record at 66.2%.

What people in the thread said

• @drk_2012 replied that 0DTE trading looks like gambling, with losses far more likely, and compared it with how many traders treat weekly index options in India. The comparison is fair for buyers who hold to expiry without a plan.
• @Outnumbereddan argued that choppy, back-and-forth index moves are how option premiums get "burned", and that the house usually wins. Time decay does favour sellers on most quiet days, but sellers carry the tail risk explained below.

These are community comments, summarised in our words; the data and sources below come first.

The fact-checked answer

How big it is. Cboe reported that SPX 0DTE options grew to a record 66.2% of total SPX volume in July 2026. In September 2026 SPX 0DTE set a record monthly average of 3.4 million contracts a day. Across the whole US options market, same-day options averaged 24.2 million contracts a day in the third quarter of 2026, about 36% of all options volume.

Why traders like them.

• Low premium in dollars. With hours left, an option has little time value, so it costs less than a weekly or monthly one.
• Big percentage moves. Near expiry, option prices react sharply to small moves in the index, a property called high gamma.
• No overnight risk. The position settles the same day.
• SPX features. Cboe describes SPX options as cash-settled and European-style, so there is no early assignment and no delivery of shares, with daily expirations and potential 60/40 tax treatment as Section 1256 contracts.

What can happen to one 0DTE SPX call in a day

Illustrative at-the-money call, before commissions. SPX multiplier is $100 per point. In 2026 the S&P 500's average daily move was about 47 points, by UXS calculation from FRED data, so 60-point days are not rare. Tap a column header to sort.

Scenario at the close	Index move from entry	Long call bought for $5.00 ($500)	Short call sold for $5.00 ($500)
Index finishes below the strike	Flat or down	−$500 (−100%)	+$500
Index finishes 5 points above the strike	+5 points	$0 (break-even)	$0
Index finishes 20 points above	+20 points	+$1,500 (+300%)	−$1,500
Index finishes 60 points above	+60 points	+$5,500 (+1,100%)	−$5,500

Why they are risky. The same short life that makes them cheap means there is no time to recover. A bought option needs the index to move far enough, fast enough. Most days, the time value bleeds away and the option expires worthless or nearly so. For sellers, the risk is reversed: many small wins, then one day with a big move can erase months of premium. Our page on how much you can lose on a call or put has the full payoff logic.

UXS decision diagram

Should you trade 0DTE at all?

Text version of the diagram

1. Do you understand how option prices change with time and volatility? If no: Learn on longer-dated options or paper first
2. Do you know the most you can lose on this trade before entering? If no: Do not trade it; undefined risk is how accounts blow up
3. Is the position small enough that a 100% loss is acceptable? If no: Cut size; 0DTE premiums often go to zero
4. Do you have a written exit rule for both gain and loss? If no: Without one, hope becomes the plan
5. Otherwise: Proceed with a defined-risk trade, small size, and a journal

Diagram drawn by UXS. A simplified decision aid for education, not a recommendation.

Defined risk matters. Buying options or trading spreads caps the loss. Selling uncovered options does not. Broker margin may allow it, but one large move can create losses larger than the account. Market-wide circuit breakers and volatility spikes, covered in what the VIX is, are exactly the days sellers get hurt.

Does 0DTE move the market? Researchers and exchanges debate whether hedging by dealers who sell 0DTE options amplifies intraday swings. There is no settled answer, and Cboe's data show volume growth but do not prove market impact.

Decision helper

Related reading: what triple witching is, how a covered call works above the strike and why S&P 500 futures move overnight.

Common mistakes

• Buying far out-of-the-money calls because they are cheap.
• Selling naked options for "free money".
• Holding to the final minutes hoping for a reversal.
• Sizing as if a 100% loss is unlikely.

FAQ

What does 0DTE mean?

Zero days to expiry: options traded on the day they expire.

How much of SPX volume is 0DTE?

Cboe reported a record 66.2% of SPX volume in July 2026.

Can you lose more than you invest with 0DTE?

Buyers can lose 100% of the premium; sellers of uncovered options can lose much more.

Are 0DTE options good for beginners?

Generally no. They demand precise timing and strict risk limits.

Why are SPX options cash-settled?

There is no delivery of shares; positions settle in cash, and SPX options are European-style.

Do 0DTE options trade every day?

Yes. SPX now has expirations on every trading day.