The trader works on the floor of the New York Stock Exchange (NYSE) in New York City, USA on April 11, 2025.
Brendan McDermid | Reuters
Since “Liberation Day” has given investors more advantages than ever, there has been a continuing revolving wild in stocks, and the popularity of options from zero to expiration is partly responsible.
From zero date, a extraction option is a contract that expires on the same day that it is being traded. According to JPMorgan data, trading volume for 0DTE options linked to the S&P 500 has skyrocketed to 8.5 million, a 23% jump from the start of the year, accounting for around 7% of the total volume of the US options market.
These securities have become popular tools for large and small investors to create quick amounts or hedges against sudden, event-driven moves in a wider market. Many argued that a large number of these short-lived vehicles could exacerbate price fluctuations in the market as dealers and market makers buy and sell underlying assets to balance their positions.
“We see zero data options amplify the market and exaggerate almost up and down. If we went back 10 or 20 years ago, we didn’t have these catalysts.” “When we see the movement of the underlying options exaggerated, it’s like gasoline from a fire.”
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S&P 500
Volatility spiked as Trump introduced sudden tariffs on major US trading partners, repeatedly reversing and changing his own policies. On Wednesday, the S&P 500 recorded the third-largest profit in post-World War II history. Last week, the Dow Jones industrial average fell at least 1,500 points on its first consecutive day in history.
According to data from CBOE Global Market, the S&P 500’s intraday volatility almost doubled last week, surpassing the 2020 high, reaching the level last seen at the depths of the 2008 financial crisis. This extreme uncertainty has driven the demand for 0DTE as investors try to hedge risk and harness volatility.
“We found that 0DTE (+1DTE) helps to promote higher daytime activities. This higher daytime activity is not necessarily captured by a standard that is close to closing.”
These options are also accessible to retail investors using online broker Robinhood. An option is a contract that gives rights to the owner, not an obligation, nor is it an obligation to be held.
“Options have been an institutional tool for decades, and the refinement of retail investors has made it possible for more and more people to use hedging and simply guessing options,” Kilberg said.
