GLOSSARY // Options
0DTE (Zero Days to Expiration)
A 0DTE option expires the same day it trades. Once reserved for the occasional Friday, the category exploded after SPX and the major index ETFs listed expirations for every trading day; by 2023-2024, 0DTE contracts made up roughly 40-50% of all SPX option volume.
Everything about options is compressed into hours: theta burns by the minute, gamma is at its maximum, and a same-day contract can double or go to zero on a 0.5% index move. There is no overnight risk and no time to be early — the thesis has to play out before the close. Premium sellers harvest the fastest decay on the board and accept that one sharp move can take back weeks of gains.
SPX opens at 5,000. A 0DTE 5,010 call trades at $8.00 ($800, with SPX's 100 multiplier) at 9:45 AM. If the index grinds sideways, the call is near $2.00 by 1 PM on decay alone. If SPX pops 1% to 5,050 by 2 PM, the call is worth about $40.00 — a 5x. Settlement math is unforgiving: at the 4 PM close, it is worth exactly max(0, SPX - 5,010).
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.