Corporate events & settlement
What is 0DTE (Zero Days to Expiration) Options Trading and what are its unique mathematical risks?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
0DTE options expire the same trading day they are traded, exhibiting extreme theta decay and gamma risk since price swings cause outsized percentage changes in option value within hours.
How it works
Introduced broadly with daily SPX expirations starting 2022, these contracts attract high-frequency speculative and hedging flow because of near-zero time value cushion and rapid directional leverage.
An example
An SPX 0DTE option can swing from near-worthless to deeply in-the-money within a single afternoon session on a sharp index move.
Risk & limitations
Extreme gamma means small underlying moves cause disproportionate losses or gains; most 0DTE contracts expire worthless, and assignment/exercise timing leaves little room to react.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.