Zero-Day Options (0DTE)🔍 What Are Zero-Day Options (0DTE)?
The term “0DTE” stands for Zero Days to Expiration. These are options contracts that expire on the same day you buy or sell them.
In simple words, if today is Thursday and you’re trading a weekly Nifty or BankNifty option that expires today — you're trading a 0DTE option.
This type of option:
Has no time left beyond today.
Is highly sensitive to price movement.
Is extremely risky and extremely rewarding.
Earlier, we only had Thursday expiry for weekly options. But now, due to growing popularity, exchanges have introduced:
Nifty 50 expiry: Monday to Friday (Daily)
Bank Nifty expiry: Tuesdays and Thursdays
Fin Nifty expiry: Tuesdays
Sensex expiry: Fridays
This means 0DTE trading can now happen almost every day!
📈 Why 0DTE Trading Has Become So Popular
Zero-Day Options are now one of the most actively traded instruments — both by retail and institutional traders. Here’s why:
1. Small Premiums, Big Potential
Since the option expires today, its price (premium) is very low — sometimes just ₹5 or ₹10. If the market moves in your favor, that ₹10 option can quickly become ₹50 or ₹100.
That’s a 5x to 10x return, sometimes in just 15-30 minutes.
2. No Overnight Risk
You’re in and out the same day. No gap-ups, no global tension ruining your position overnight.
3. Scalping Friendly
Perfect for intraday traders who don’t want to hold positions for long.
4. Lots of Movement Near Expiry
Prices jump fast because time is running out. This gives more opportunities — but also more chances to get trapped.
5. Better Tools & Platforms
With modern brokers offering real-time data, scalping tools, and fast execution — more traders are trying 0DTE.
💼 How Do 0DTE Options Work?
Let’s take a simple example:
Today is Thursday, and Nifty is trading around 22,000.
You think it will rise, so you buy a 22,100 Call Option (CE) at 11 AM for ₹15.
If Nifty rises 50 points in the next 30 minutes, your option may become ₹45.
That’s 200% return.
But… if Nifty remains flat or falls, your option may go to ₹0 by the end of the day.
What Makes Them Move So Fast?
There are 3 reasons:
Time Decay (Theta): Since it's the last day, every minute that passes reduces the option's value if there's no movement.
Volatility: Even small market moves can cause big percentage changes in premium.
Greeks Sensitivity: Delta, Gamma, and Vega — all move faster near expiry.
🔁 Most Common 0DTE Strategies
1. Directional Option Buying
Buy a Call or Put based on price action.
Works best when there's momentum or breakout.
Example: Buy 22,100 CE at ₹10 → Nifty moves up → Exit at ₹50.
👍 High reward
👎 High risk (can go to zero)
2. Straddle/Strangle Selling (Non-Directional)
Sell both Call and Put at the same or nearby strikes.
You win if the market stays in range.
Example: Sell 22,000 CE and 22,000 PE → Market closes at 22,000 → Both go to zero.
👍 Profit from time decay
👎 If market breaks out in any direction, huge loss
3. Iron Condor
Sell OTM Call and Put spreads to capture decay in a defined range.
Lower risk, but also lower return.
👍 Safer than naked straddle
👎 Limited reward
4. Scalping with 1-2 Candle Momentum
Monitor breakouts on 1-min or 3-min chart.
Take quick entries and exits with small quantities.
👍 Quick gains
👎 Requires sharp execution and discipline
🏦 Who Uses 0DTE — Institutions or Retail?
🔹 Institutions:
Use algos to sell options in range.
Make profit from premium decay.
Use 0DTE to hedge portfolios or capture intraday IV changes.
🔹 Retail Traders:
Use for quick profits or gambling.
Often go for cheap out-of-the-money options.
Tend to overtrade without understanding risk.
⚠️ Risks Involved in 0DTE Trading
Let’s be honest — 0DTE options are not safe for everyone.
Here are the major dangers:
1. Time Decay (Theta Burn)
Every minute, the option loses value unless the market moves.
2. Fast Premium Erosion
Flat markets = quick loss. A ₹10 option can go to ₹0 in 15 minutes.
3. No Margin for Error
You need to be right on direction, timing, AND speed. All three.
4. Emotional Stress
Prices jump fast. Without discipline, you’ll end up revenge trading.
5. Overtrading
Traders often re-enter after loss without a plan — increasing risk.
🎯 Real-World Example of a 0DTE Trade
Let’s say it's Tuesday, and you’re trading BankNifty (expires today).
10:00 AM: BankNifty at 47,200
You buy 47,300 CE at ₹12
10:30 AM: BankNifty jumps 80 points
Your CE becomes ₹42
You exit — 250% return
But…
If BankNifty remained flat or dropped, that ₹12 option may go to ₹3 or even ₹0.
Same day. Same strike. Two opposite outcomes.
💡 Tips for Beginners to Trade 0DTE Safely
Start with Small Capital
Never risk your full capital on one trade.
Set Hard Stop-Loss
Exit if your option loses 40-50%. No second thoughts.
Trade in Breakout Zones
Avoid choppy ranges — they kill premiums.
Watch Open Interest + Price Action
See where the buyers/sellers are active.
Trade First Hour or Last Hour
That’s when you get big movements and clear setups.
Avoid Trading Just for Fun
0DTE is not for boredom. It’s for precision and skill.
Do Not Hold Till 3:30 PM
If you’re an option buyer, premiums usually die in the last 15 minutes.
🧠 Should You Trade 0DTE Options?
✅ YES — if:
You have solid technical analysis
You understand risk management
You can stick to a strict plan
You are okay with losing 100% on a bad trade
❌ NO — if:
You are emotionally reactive
You don’t track charts closely
You trade with borrowed or large capital
You don’t know how option Greeks work
🏁 Final Words
Zero-Day Options are not just another strategy. They are a whole new mindset of trading.
If used with the right knowledge, strict rules, and patience, they can become a powerful weapon in your trading toolbox. But if misused, they are the fastest way to drain your account.
Respect the instrument. Learn the rules. Start small. Scale with confidence.
