What is 0dte options?

Trading 0DTE options means that a trader purchases the options contract the same day it expires. Typically an options contract has weeks and sometimes months until expiration, providing a trader with ample time to adjust or manage positions. With 0DTE options, there is little to no room for error.

What is a 0dte trade?

0DTE trades are popular among option writers. The play is to offload on the last day that the option is valid and collect the rapidly decaying premium. When purchasing an option, you pay the person selling it (the other party in the trade) for the privilege of giving you the right to buy the underlying asset at the specified strike price.

How many 0dte options are available a month?

Technically, all optionable stocks have 0DTE options available at least once a month. However, the most commonly traded 0DTE options are on the SPX. Stocks that offer monthly options only have 0DTE options once a month, and stocks that offer weekly options as well have them once a week.

What is option spread 0dte?

An option spread is initiated when a trader buys and sells an option contract to open a position. For trading 0DTE options, traders would avoid using types of spreads with different expiration dates like calendars. Considering this, traders often use call credit spreads and put credit spreads.