Zero-day-to-expiration options now make up the majority of daily S&P 500 options trading. More than 2.1 million of these contracts trade every day, accounting for 61 percent of all activity. “Trading volume in extremely short-dated contracts tied to the S&P 500 has surged… more than 2.1 million of them changing hands daily, accounting for 61% of total activity.” https://www.morningstar.com/news/marketwatch/20250722105/retail-traders-just-cant-quit-risky-zero-day-options-as-trading-volume-booms
This bull market is built differently. A new generation of "buy the dip" investors, who were told to fear crashes but instead learned to love vol, is propping it up
These bullish investors function like short sellers did previously, buying during panic
My latest for @WSJheard
— Gunjan Banerji (@GunjanJS) August 11, 2025
Retail traders are leading this boom. Between 50 and 60 percent of zero-day options trading is from everyday investors. Many jump in making directional bets without a real plan. “Retail accounted for between 50% and 60% of 0DTE trading… many are placing directional bets with no plan.” https://blog.tradeup.com/2025/08/07/0dte-trading-mistakes-to-avoid-common-pitfalls-and-how-to-steer-clear
This is not hedging. It is gambling. These contracts expire the same day, leaving no margin for error or second chances. The rush is instant, but so is the risk. The casino is not in Las Vegas. It is in your brokerage app.
But there is more going on here than just individual losses. The flood of zero-day bets is shaking up market dynamics. Rapid-fire, high-risk trades can send prices swinging wildly within minutes. This puts pressure on the market makers and can confuse price signals that investors rely on. It adds a layer of volatility few expected.
Regulators are taking notice, worried that inexperienced traders could suffer heavy losses while the market faces new risks. Some experts say these products are built to lure gamblers, not serious investors. The line between investing and betting is blurring fast.
Meanwhile, trading platforms are cashing in. Every trade brings fees, so brokers have a clear reason to encourage fast, risky moves. That raises a question: are investors being nudged into dangerous territory without fully understanding what they are getting into?
Education is critical. Many retail traders dive into zero-day options with little knowledge of the risks or strategies needed to survive. Without guidance, the odds are stacked against them.
Zero-day options might offer quick thrills, but for most people they end in painful lessons. The real question is how many will learn before the house wins.