ODTE

How to manage risk in option buying?

 

0DTE (zero days to expiration) options trading has gained significant popularity among traders in recent years. 0DTE (zero days to expiration) options are contracts that expire at the end of the current trading day.

These traders are characterized by their focus on short-term market movements and their willingness to take on higher risks for potentially quick profits. Here are some key aspects of 0DTE traders:

 

Trading Style

0DTE traders typically:

1. Capitalize on intraday price movements

2. Seek to profit from rapid time decay of options premiums

3. Use strategies that leverage short-term market fluctuations

 

Popular Strategies

Some common approaches used by 0DTE traders include:

1. Selling call or put spreads

2. Implementing iron condors

3. Trading naked options (though this carries significant risk)

4. Using iron butterflies for market-neutral positions

 

 

 These options can be newly issued or existing contracts that have reached their final day of trading.

 Key features of 0DTE …