Zero-Day Options Are Most Popular on S&P 500 as Dominance Grows

(Bloomberg) — S&P 500 Index zero-day options outperformed all other maturities combined for the first time in the fourth quarter, the latest benchmark to mark the growing dominance of short-dated contracts.

Most read from Bloomberg

Same-day options trading totaled more than 1.5 million contracts a day in the final three months of 2024, accounting for 51% of total S&P 500 Index options volume, according to Cboe Global Markets Inc. compiled by Asym 500. data for the same period in 2021. At that time, the so-called 0DTE volume was less than half.

“It’s a combination of higher intraday volatility, more macro catalysts like the U.S. election, and continued acceptance by retail investors of trading index options for risk management and trading,” said Mandy Xu, Cboe’s head of derivatives market intelligence. :

The move underscores the meteoric rise in day-trading of S&P 500 Index options that Cboe made available in the second quarter of 2022. The tool caught on with retail investors during the Covid pandemic, and is now a sign of acceptance among institutional traders are derivatives to hedge or bet against sudden movements in the US benchmark, from economic events to Federal Reserve interest rate decisions to major corporate earnings;

“Daily options expirations are steadily gaining traction, especially as they begin to have enough history to test systematic strategies,” said Asym 500 founder Rocky Fishman growth could only have helped everything.”

The contracts have been as controversial as they have been popular, prompting some market participants to worry that the high volumes could exacerbate sudden market moves as dealers buy and sell the underlying instruments to balance their positions, a claim denied by Cboe and others by those who note that investor trading is balanced between long and short positions, which makes the so-called gamma less likely any major move as a result of hedging.

Most Read from Bloomberg Businessweek

©2025 Bloomberg LP