0DTE options take this concept to the extreme by selling options that are set to expire on the same day they are sold. For example, if I own 100 shares of the SPDR S&P 500 Index ETF ( SPY ) trading at $513 on April 4th, I might sell a 0DTE option like "SPY240404C00514000."...
Zero-day options have the same risk profile as regular options, but their abbreviated lifetime before expiration means that risk is heightened still further. Options have a fixed life and then expire. At expiration, the opportunity to trade them is over, and these “side bets” on the stock...
Advanced Options Strategies Broken Wing Butterfly Collar Option Long Butterfly Spread Ratio Spread Straddle Strangle Options Trading Fundamentals 0DTE Options Assignment Best Stocks for Options Trading Call Options Defending Positions Delta Neutral Hedging Extrinsic Value How Are Options Taxed How to Pick...
Now let's look at two hypothetical scenarios, one is which ABC stock falls to $20/share and another in which ABC stock rises to $25/share. It’s assumed that the investor has held the short call position until the day the options expire. ...