There’s a shift happening in the markets that most traders are completely unaware of — and it’s changing the game in ways that are fundamentally different from anything we’ve seen before.
I’m talking about 0DTE options. These are same-day expiration contracts that the CBOE officially launched, and calling them a success would be a massive understatement. The growth trajectory here is unlike anything I’ve witnessed in my career, and the numbers tell a story that every serious trader needs to understand.
Before the pandemic, 0DTE volume made up less than 20% of all daily options transactions. It was a small corner of the market — interesting but not exactly a game-changer.
Then something happened.
By 2021, that 20% nearly doubled. By 2023, it doubled again. And now? 0DTE options represent more than 60% of all options trading volume. We’re talking about nearly two-thirds of total daily volume concentrated in these same-day contracts.
The climb has been so steep and so fast that you could easily map it as a straight shot upward — a timeline of a product that went from obscurity to outright dominance.
Think about that for a second. In just a few years, we’ve gone from a niche product to complete market dominance.
Why This Volume Concentration Actually Matters
This isn’t just a fun fact for cocktail party conversation — this volume shift has real consequences for how markets behave.
When 0DTE options carry this much weight, they don’t just reflect what’s happening in the underlying S&P 500. They actually control the outcome roughly eight out of every 10 days, and there’s a specific reason behind that.
It comes down to dealer inventory risk. Dealers who take the other side of these contracts are forced to adjust their hedges constantly as price moves. Because 0DTE options decay so rapidly, small intraday shifts can create massive hedging flows as dealers scramble to stay neutral.
These adjustments push the underlying index around, creating self-reinforcing price action that can dominate an entire trading session.
That’s a fundamental change in market structure. The tail isn’t just wagging the dog anymore — the tail has become the dog.
What this means in practical terms is that the traditional relationship between options and their underlying has flipped. These short-dated contracts are now driving price action in the index itself, creating a gravitational pull that didn’t exist in previous market eras.
What You Need to Do Differently
If you’re still trading like it’s 2019, you’re operating with an outdated playbook. The market doesn’t work the same way it did before this 0DTE explosion.
You need to understand that intraday moves are increasingly influenced by these same-day expirations. The flow of capital into and out of 0DTE positions is creating price action that can override traditional technical levels or fundamental catalysts.
One recent intraday setup illustrates this perfectly. A clean directional move aligned with a cluster of expiring contracts, and anyone who entered with proper risk control could have walked away with an 81% return before dinner.
These kinds of opportunities exist because the structure of the market has changed — the pressure from dealer hedging can accelerate a move with little warning, and traders who recognize those moments can capitalize on them.
This doesn’t mean your strategy is broken — it means you need to account for a new variable that’s now controlling outcomes most days. Ignore this shift at your own risk because the market you’re trading now isn’t the same one from a few years ago.
The CBOE absolutely hit it out of the park with 0DTE options. The question is whether you’re adapting to the new reality they’ve created.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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