Options trading volumes have surged in recent years, and zero-days-to-expiration (0DTE) options have emerged as a popular tool for active traders. These contracts only last for a single session, offering concentrated exposure that makes them especially appealing during high-leverage events.
One use case? Earnings. When a company reports results the same day its weekly options expire, that creates an intriguing 0DTE setup. In this scenario, everything hinges on a single trading session — the earnings release is the catalyst, and the outcome defines the entire return profile of the trade. It’s a pure directional bet, where the cost of the options incorporates the expected move associated with the event, but not the same degree of time risk (e.g. extrinsic value) associated with longer-dated options.
