0DTE Options: A New Trend in Trading

Introduction

• 0DTE Options: Zero days to expiration options have surged in popularity recently.
• Big Wins and Losses: These options allow intraday betting on stock market moves, resulting in potential significant profits and losses.

Trader Insight

• Drayson Little: Began trading 0DTE options in 2020.
  • Full-time trader since 2021.
  • Lives in Las Vegas; starts trading early to align with the East Coast market.
  • Daily Routine: Checks Twitter first for news and market trends.
• Experience:
  • Profits: Made significant profits, including $100 in a minute, with one of the biggest one-day profits being $14,000.
  • Losses: Suffered substantial losses, with one of the biggest being around $12,000.
  • Emotions: Describes the trade experience as euphoric highs and devastating lows.

Characteristics of 0DTE Options

• Sensitivity: Extremely sensitive to stock price changes, leading to rapid value fluctuations.
• Appeal: High potential returns with comparatively lower costs than longer-dated options.
• Risk: Many retail traders experience large losses, especially in their initial trading phase.

Rise in Popularity

• Accessibility: Once reserved for professionals, now accessible to retail traders.
• Viral Phenomenon: Increased discussions and mentions online, significant growth in trading volumes.
• Exchanges: Options exchanges now offer 0DTE contracts daily, boosting activity further.

Retail vs Professional Traders

• Retail Traders: Mostly attracted from meme stocks and have increased the 0DTE trading volumes.
• Professional Traders: Use sophisticated tools and hedging strategies, creating concerns about market impact.

Market Concerns

• Volatility: Concern that high 0DTE trading volumes might lead to significant market volatility, akin to the meme-stock frenzy.
• Hedging Impact: Professional traders' hedging activities could amplify market movements.
• Debate: The extent of the potential market impact of 0DTE options is still debated on Wall Street.

Trader Perspective

• Learning Experience: Despite the risks and losses, trading 0DTE has been an enriching experience for Drayson.
• Achievements: Used trading profits to achieve personal goals: buying a dream car (AMG GTR), a Rolex, and traveling.
• Future Goals: Aims to earn six-figure monthly revenues and start an options trading course.

Conclusion

• Outlook: Emphasizes persistence through the highs and lows to achieve long-term goals.