What are Zero Day Options?
Zero-day-to-expiration options are contracts that expire the same day that they’re traded.
“You’re seeing the zero data options market amplify and exaggerate almost up or down. If you go back 10, 20 years, you didn’t have these catalysts,” said Jeff Kilburg, KKM Financial CEO and CIO. “It’s almost like gasoline on a fire when you see a move being exaggerated by the underlying options move.”
In a series of posts on X, the billionaire investor and founder of Pershing Square Capital Management criticized the heavy use of leverage in markets, asking his 1.7 million followers: “How have 3X leveraged ETFs and Zero Days to Expiration (0DTE) options advanced society or contributed to our economy?”
So-called zero-day options — which are contracts that expire within 24 hours — have also exploded in popularity, with some investors saying they can exacerbate volatility in broader equity markets.