{"id":9010,"date":"2024-12-04T14:15:52","date_gmt":"2024-12-04T14:15:52","guid":{"rendered":"https:\/\/finderica.com\/0dte-what-investors-should-know-about-zero-day-options\/"},"modified":"2024-12-04T14:15:52","modified_gmt":"2024-12-04T14:15:52","slug":"0dte-what-investors-should-know-about-zero-day-options","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=9010","title":{"rendered":"0DTE: What Investors Should Know About Zero-Day Options"},"content":{"rendered":"
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Many traders try to profit from short-term swings in the stock market by buying <\/span>call options<\/span> or <\/span>put options<\/span>, rather than buying the underlying stocks themselves.<\/span><\/p>\n<\/div>\n

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Some investors use options as insurance against unexpected market movements (for example, selling <\/span>covered calls<\/span> on a stock they own), or buy call options to get exposure to a stock for less than the cost of its shares.<\/span><\/p>\n<\/div>\n

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But other traders use options for high-risk, high-reward speculation. Recently, an especially-risky type of <\/span>options trading strategy<\/span> has become popular among speculators: zero-day options, also known as 0DTE options.<\/span><\/p>\n<\/div>\n

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What are 0DTE options?<\/span><\/h2>\n
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Zero-day options are normal options \u2014 puts and calls \u2014 that expire in less than one day, hence the \u201c0DTE\u201d nickname (short for \u201czero days to expiration\u201d).<\/span><\/p>\n<\/div>\n

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Typically, traders buy options well in advance of their expiration date. A trader might buy call options, and then wait for positive investor sentiment or good news (such as a favorable earnings report) to increase the price of the underlying stock, so that they can resell or exercise the calls for a profit before expiration.<\/span><\/p>\n<\/div>\n

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But 0DTE option traders buy options on the day they expire, in the hopes that they can quickly profit from a last-minute swing in price.<\/span><\/p>\n<\/div>\n