How Nasdaq’s 0DTE Options Will Impact Traders

by MarketNewsData

Nasdaq has proposed new “zero days to expiry” options on eight mega-caps—Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, Tesla and Broadcom—plus the XLF ETF, with contracts expiring every Monday and Wednesday. If regulators sign off, investors of all stripes will feel the ripple effects almost immediately.

Impact on Stockholders

  • Tighter Spreads: Market-makers’ rapid hedging should narrow bid-ask gaps in the underlying shares.
  • Bumpier Rides: Frequent hedging may amplify intraday swings around popular strike prices.
  • Unchanged Fundamentals: Company earnings and growth paths remain unaffected by new option listings.

Impact on Short-Term Traders

  • Twice-Weekly Opportunities: More expiration days mean fresh chances to place directional or income trades.
  • Fast Decay Profits: Sellers can harvest steep time decay—but only if they manage exit points precisely.
  • Sudden Loss Risk: A sharp late-session move can wipe out gains in seconds.

Impact on Long-Term Strategists

  • Marginal Hedging Tool: You might layer 0DTE to tweak delta, but gains are small versus longer-dated contracts.
  • Signal Clutter: A surge in same-day volume can obscure true sentiment in multi-month options.

Nasdaq’s 0DTE plan could boost liquidity and trading flexibility—but it will demand sharper risk controls and leave buy-and-hold investors bracing for livelier sessions.

More Live News