In the financial markets of 2024, a frenzy called "Zero-Day Options (0DTEs)" is quietly rising on Wall Street. This financial derivative, with its extremely short expiration period and potential for high returns, has attracted the attention of countless investors. Trading volume for Zero-Day Options (0DTEs) continues to reach record highs. According to a report from JPMorgan Chase, the trading volume of these options already accounts for half of all S&P 500 index options trading volume.

source：Huaxi Securities

Definition and Characteristics of Zero-Day Options
Zero-day options, also known as 0DTE options, are option contracts with a duration of only one day. These options typically expire and become ineffective on the same trading day, hence they are also referred to as "intraday options" or "24-hour options." The key characteristics of zero-day options lie in their extremely short trading cycle and higher leverage, enabling investors to potentially achieve significant profits within a short period.

Due to their imminent expiration, the prices of 0DTE options are usually cheaper compared to longer-term options, but they offer greater leverage, allowing investors to control a market value of up to $1000 for every $1 invested. However, at the same time, this higher leverage also amplifies investors' risks, as adverse market movements can lead to substantial losses.

Operation Mechanism of Zero-Day Options
Options are financial derivatives that grant the buyer the right, but not the obligation, to buy (call options) or sell (put options) the underlying asset at a specified price within a specific period. Zero-day options are characterized by their high-risk, high-reward nature, as their time value (theta) decays rapidly, resulting in a rapid decrease in the option's value before expiration.

Impact of Zero Date Options on the Market
● Intensified speculative atmosphere: The emergence of zero date options further intensifies the speculative atmosphere in the market. With the ability for investors to generate high returns in extremely short periods, it attracts a significant influx of speculators into the market. However, such speculative activities often lack rational analysis, leading to market volatility and bubble concerns.

● Increased market risk: The high leverage effect of zero date options renders investors more vulnerable to market risks. In the face of adverse market movements, investors may face rapid liquidation, resulting in substantial losses. Additionally, due to the extremely short expiration time of zero date options, investors often need to make decisions within a very brief timeframe, increasing decision-making difficulty and risk.

● Enhanced market liquidity: Despite bringing numerous risks, zero date options also enhance market liquidity. With investors able to complete transactions in extremely short periods, it makes the market more active, providing investors with more trading opportunities.

Zero date options, with their high leverage characteristics, attract a large number of high-frequency traders and retail investors, but also bring market volatility. Some analysts are concerned that the popularity of 0DTE options may exacerbate tail risks in the market, potentially leading to market crashes similar to the "Volmageddon" event of 2018. However, there is also a viewpoint suggesting that the reality behind 0DTE options is far more complex than anticipated and may not directly result in market catastrophes.

What types of zero date options exist in the market?
Here are some types of zero date options (0DTE) that exist in the market:

How to place a trade on uSMART mobile application：
After logging into the uSMART SG APP, click on "Search" from the top right corner of the page. Enter the desired stock code to access the details page for trading information and historical trends. Click on "Trade" at the bottom right corner and select the "Buy/Sell" function. Finally, fill in the trading conditions and submit the order. Please see the image guide below for step-by-step instructions:

This diagram is provided for illustrative purposes exclusively

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