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Zero Day Options

All articles tagged with #zero day options

finance2 years ago•3 min saved

The Controversial Rise of Zero-Day Options in Stock Trading

Zero-day options, specifically put options expiring within 24 hours, are being blamed for the sharp decline in US equities on Wednesday. Market observers suggest that the heavy trading volume in these options prompted market makers to hedge their exposure, pushing the market lower. The S&P 500 Index dropped 1.5%, its biggest decline since September, with the selloff attributed to the combination of overbought conditions, thin trading ahead of the holidays, and the influence of zero-day options. The debate continues on the broader impact of these options, with institutional investors using them to hedge short-term risk while retail investors make big bets with little money down.

via Yahoo Finance|

#finance #market-volatility #put-options

finance2 years ago•1 min saved

The Rise of Zero-Day Options and Their Impact on Market Makers

Zero-day options now make up 50% of S&P options volumes, indicating a growing trend in the use of these financial derivatives. Traders are increasingly utilizing zero-day options as part of their trading strategies, highlighting the importance of staying informed about market trends in the finance industry.

via Financial Times|

#finance #financial-derivatives #market-trends

finance2 years ago•6 min saved

The Rise of Zero-Day Options: Wall Street and Reddit's Risky Lottery Tickets

Zero-day to expiry options, or "0DTEs," have gained popularity among both retail and institutional investors, with activity in the market hitting record levels. These options, which have a short lifespan of 24 hours or less until expiration, are being used by retail investors as high-risk "lottery tickets" and by large funds to tactically hedge their portfolios. While the boom in 0DTEs has sparked concerns about market stability and volatility, exchanges maintain that the products are mostly being used for hedging purposes. The growing popularity of 0DTEs has also led to the introduction of ETFs focused on these options.

via MarketWatch|

#finance #options-trading #retail-investors

finance2 years ago•4 min saved

Defiance Launches QQQY, the First ETF to Utilize Daily Options for Enhanced Income

The first exchange traded fund (ETF) to trade in "zero-day-to-expiry" options, which are contracts with a maturity of 24 hours or less, has launched in the US. The Defiance Nasdaq Enhanced Option Income ETF (QQQY) has been listed on the Nasdaq stock exchange, with a sister product, the Defiance S&P 500 Enhanced Option Income ETF (JEPY), set to launch next week. These ETFs will sell zero-day put options and have similar pay-off structures to covered call ETFs. Zero-day options have surged in popularity, accounting for 43% of overall S&P 500 options volume. The ETFs aim to generate daily premium income and appeal to investors seeking high-income investment strategies. However, some experts have raised concerns about the complexity and risks involved in options-based strategies.

via Financial Times|

#etfs #finance #income-generation