0DTE Options Strategy: How It Works, With SPX Examples

By Bruno Nalon · October 24, 2026 · 5 min read

0DTE means zero days to expiration: options bought or sold on the day they expire. They are now a large share of all S&P 500 index option volume, and most of that trading happens in SPX. A 0DTE strategy can collect premium or make a cheap directional bet in a few hours, but the same speed that makes it attractive makes it dangerous. Here is how the main strategies work, with SPX numbers, and what to have in place before you try one.

What a 0DTE options strategy is

A 0DTE options strategy opens and closes - or lets expire - a position on its expiration day. Because there is almost no time left, these options are cheap and their prices react violently to small moves in the underlying.

SPX has an expiration every trading day, Monday through Friday, so there is always a 0DTE contract available. Traders use that for three things: selling premium that decays to zero by the close, making a low-cost bet on the direction of the day, or hedging an existing portfolio for a single session, such as an inflation report day.

Why traders use SPX for 0DTE

SPX, SPY and XSP all track the S&P 500, but they behave differently at expiration:

Why traders use SPX for 0DTE
	SPX	SPY	XSP
What it is	S&P 500 index	ETF tracking the index	Mini index, 1/10 of SPX
Settlement	Cash	Shares	Cash
Exercise style	European (no early assignment)	American	European
Contract size at SPX 6,700	About $670,000 notional	About $67,000 notional	About $67,000 notional
US tax treatment	Section 1256 (60/40)	Ordinary equity option rules	Section 1256 (60/40)

Cash settlement and European exercise mean there is no assignment into shares and no surprise position on Monday: an in-the-money SPX option simply pays its value in cash at expiration. Daily SPX expirations stop trading at 4:00 p.m. ET and settle on the index close. XSP gives the same structure at one tenth of the size, which matters a lot for smaller accounts. Tax rules depend on your situation; confirm with a tax professional.

The expected move for the day

Every 0DTE trade starts with one question: how far can SPX reasonably move today? The VIX gives a fast estimate. Divide the VIX by 15.9 (the square root of 252 trading days) to get the expected daily move in percent, then multiply by the index level.

The expected move for the day
VIX	Expected daily move	With SPX at 6,700
12	about 0.75%	about ±51 points
16	about 1.0%	about ±68 points
20	about 1.26%	about ±84 points
30	about 1.9%	about ±127 points

This is a one-standard-deviation estimate for a full day: SPX closes inside that range roughly two days out of three. Later in the day the remaining expected move shrinks, but news can blow through it at any time. Strikes inside the expected move get tested often; strikes well outside it are where most premium sellers place their short options.

Three 0DTE strategies with SPX examples

The examples below assume SPX at 6,700 at 10:30 a.m. ET with the VIX near 16, so the expected move for the day is about 68 points. Prices are illustrative; live quotes will differ.

Three 0DTE strategies with SPX examples
Strategy	Example trade	Credit or debit	Max profit	Max loss	Breakeven at the close
Put credit spread	Sell 6,630 put, buy 6,620 put	$0.90 credit	$90	$910	6,629.10
Iron condor	Sell 6,630/6,620 put spread and 6,770/6,780 call spread	$1.80 credit	$180	$820	6,628.20 and 6,771.80
Call butterfly	Buy 6,690 call, sell two 6,700 calls, buy 6,710 call	$3.00 debit	$700	$300	6,693 and 6,707

Notice the shape of the credit trades: you risk about $9 to make $1. They win most days because the short strikes sit outside the expected move, but a single loss erases many winners. The butterfly is the opposite: it usually loses its small debit, and pays several times that when SPX closes near the middle strike.

Gamma: why 0DTE moves so fast

Gamma measures how fast an option's delta changes when the underlying moves. On expiration day, gamma near the current price is the highest it will ever be. An option that is 10 points out of the money can go from nearly worthless to deep in the money in minutes.

Using the put credit spread above: if SPX falls 50 points to 6,650 by early afternoon, the 6,630/6,620 spread can jump from $0.90 to $3.00 or more, a loss of $210 or more on a trade that was designed to make $90. Another 30 points lower and it approaches the full $910 loss. Multi-week trades give you days to react; 0DTE trades can give you minutes.

Rules before you trade 0DTE

If you decide to trade same-day options, set these rules before the first order:

1. Defined risk only. Never sell a naked 0DTE option - the loss on a fast day has no limit you chose.

2. Size by max loss. Keep the full max loss of each trade to 1-2% of your account, even though most trades will not reach it.

3. Pick a stop in advance. A common rule for credit spreads is to close when the spread is worth two times the credit received.

4. Respect scheduled news. Inflation reports, Fed decisions and jobs data can move SPX more than a full day's expected move within minutes.

5. Be at the screen. 0DTE trades cannot be managed from a lunch break once a day. If you cannot watch the position until it closes, the trade does not fit your schedule.

6. Close before the final minutes when the position is near a strike, instead of letting the settlement value decide the outcome.

Is 0DTE right for beginners?

Usually not as a first strategy. 0DTE combines the hardest parts of options trading - fast gamma, lopsided risk and reward, and decisions in minutes - with the temptation to trade every day. It works best for traders who already understand the Greeks, have a written plan and can watch the market during the session.

EasyTrade does not send 0DTE signals. Its signals are defined-risk trades that last weeks, built for people who check the market a few minutes a day. If you are new to options, learning bull put spreads and iron condors on a multi-week timeframe teaches the same mechanics with far more time to think.

See a real signal for yourself

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Frequently asked questions

What is the best 0DTE options strategy?

There is no single best one. Put credit spreads and iron condors suit traders who want frequent small wins and can manage occasional large losses; butterflies suit traders who prefer small, frequent losses with occasional large wins. Whatever you choose, use defined risk and size by the max loss.

Can I trade 0DTE with a small account?

XSP, the mini S&P 500 index option, is one tenth the size of SPX with the same cash settlement and daily expirations, so the same strategies cost about a tenth as much. Spreads still need an account approved for them, and some brokers apply extra rules to frequent same-day trading.

Can 0DTE SPX options be assigned?

No. SPX options are European style and cash settled, so there is no early assignment and no delivery of shares. An in-the-money SPX option at expiration is settled in cash for its intrinsic value based on the index close.

How are SPX 0DTE options taxed?

In the US, SPX and XSP options generally fall under Section 1256: gains are treated as 60% long-term and 40% short-term regardless of holding period. SPY options follow ordinary equity option rules. Your situation may differ, so confirm with a tax professional.

Does EasyTrade send 0DTE signals?

No. EasyTrade signals are defined-risk options trades that run for weeks, such as bull put spreads, iron condors and cash secured puts, so they fit people who cannot watch the market during the session.

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Educational content only - not financial advice. Options trading involves significant risk and is not suitable for all investors. Past results do not guarantee future returns.