Traders are piling into zero-days-to-expiration options, or 0DTE options. They are a cheap, fast but risky way to bet on the market that offers the chance of explosive returns if those bets are correct. These big wins can also lead to big losses as they are extremely risky investments. Retail traders have played a big role in driving 0DTE trading volumes to record highs.
WSJ explains the rise and effect of 0DTE options on the stock market.
0:00 0DTE options
0:28 How it works
2:34 How it got so popular
3:32 How it’s impacting the market
Some days the high-speed news cycle can bring more questions than answers. WSJ’s news explainers break down the day’s biggest stories into bite-size pieces to help you make sense of the news.
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