The Rise of SPX 0DTE Trading: Analyzing Volume Trends

Zero-days-to-expiration (0DTE) options on the S&P 500 Index (SPX) have exploded in popularity recently for traders seeking short-term opportunities in the market. These contracts expire at the end of the trading day, giving traders quick exposure and same-day results without the overnight risk of longer-dated option positions.

In this article, we’ll explore the key trends driving SPX 2024 0DTE volume, examine how those metrics change under different market conditions, and provide insights into how these trends might evolve in the future. We’ll also share how automation can optimize more efficient 0DTE trading.

Evolution of 0DTE Options

While SPX options have long been a staple for traders, the growing trend of 0DTE trading reflects a broader shift we see in market dynamics. Historically, options traders focused on longer expiration periods to give their positions time to play out because, well, that’s all that was available. 

However, as new advancements in trading platforms have accelerated – giving retail traders more powerful trading tools – so has the appetite for shorter-term trades. Enter the rise of 0DTE options, specifically with SPX, which has carved out a significant niche among options traders.

As the chart above shows, SPX 0DTE trading has grown on pace with SPX’s total trading volume, notably boosted by the introduction of daily expiration contracts in 2022 listed by Cboe, and now accounts for nearly 48% of all SPX options volume this year.

The increase in the daily volume of the 0DTE contract is consistent with broader market trends of intraday trading and high-frequency strategies. Some of the main benefits of 0DTE trading are part of a larger trend where traders are looking for faster feedback loops and more frequent opportunities. With more tools and data at their disposal, options traders are more comfortable than ever with these short-term contracts, which has led to a boom in 0DTE trading.

Even though there are dozens and dozens of expiration months available to trade SPX options, the line chart above highlights just how correlated 0DTE options volume is to overall SPX volume. With this broad understanding of 0DTE volume trends, we wanted to dive deeper into the data to see what, if anything, could explain changes in 0DTE volume.

0DTE Volume by Day of the Week

We started our analysis by looking at the average daily volume for each day of the week. No significant outliers exist; SPX's average daily volume is between 1.1m and 1.3m for all five days, with a slight increase on Thursdays and Fridays.

This slight uptick in volume at the end of the week could be the result of traders looking to participate in non-eventful market-moving days without earnings or FOMC announcements, which typically occur early in the week, and/or the cumulative effect of weekly contracts also expiring on Friday.

0DTE Volume vs. SPX Price Changes

The chart below displays the relationship between SPX 0DTE volume and the daily percentage change in the SPX index.

Key Observations

1. Concentration Around Small Price Changes: Most data points are clustered around days when the SPX price change is relatively small (near 0%), indicating that there tends to be a significant amount of 0DTE trading activity on days with minimal movement in the index. This suggests that traders may still find 0DTE options useful even on days with lower volatility.
2. Lower Volume on Large Price Declines: As the SPX price change moves into negative territory (especially below -2%), we see a reduction in 0DTE volume. This could imply that traders are less inclined to use 0DTE options during sharp declines, potentially due to the increased risk that comes with intraday volatility.
3. Slight Increase in Volume on Positive Moves: Some scattered points show increased volume on days with positive price changes (up to around +2%). This could indicate that traders are more willing to engage in 0DTE trading on up days, potentially to capitalize on continued upward momentum.

0DTE Volume vs. SPX Intraday Range

Further analysis shows a positive correlation between the SPX’s daily high-low range — a common measure of intraday volatility — and 0DTE volume. On days with a larger high-low range, there tends to be more active participation in 0DTE trading. The data may suggest that traders might be more inclined to enter same-day trades when there is more intraday price movement to exploit. The larger price swings in SPX typically lead to increased volatility and higher option premiums, which could attract more traders.

0DTE Volume During Earnings Season

Finally, we looked at SPX 0DTE volume near earnings to see if there were any statistical outliers. SPX volume data during the periods around major earnings releases shows that 0DTE trading activity experienced a slight increase, but ultimately had no significant impact on the broader market.

Volume and volatility tend to increase for individual stocks leading up to and shortly after their announcement; however, the chart below illustrates that earnings season increased SPX 0DTE volume only slightly near earnings. So, for those traders who choose to 'pause' their trading during earnings season, it might be worth another look at maintaining their strategies vs. pausing them.

Automated 0DTE Strategies

Naturally, the rise of SPX 0DTE options has many traders flocking to short-term trading strategies. And while it's true that 0DTE trading offers opportunities, they also present unique risks. The condensed nature of these trades means we need to monitor positions closely throughout the session. This can be difficult for traders who can’t watch the market all day or trade the US market from an international timezone.

Automation gives traders like you and me an efficient solution for finding and managing 0DTE positions. As 0DTE SPX trading continues to gain momentum and volume increases, you may want to look for an automated tool to help give you conviction executing your strategy. 

For example, here are 5 ways automated trading can help improve 0DTE strategies:

1. Scanning for trades: Bots and automations scan the market to look for potential trades every minute of the day, instantly sending orders to your broker when a trade is available.
2. Checking criteria: Evaluate multiple positions and market criteria automatically before entering a trade. For example, based on our 0DTE Peg research, bots can look for a $5 wide SPX 0DTE iron condor .5% out of the money with a reward-to-risk ratio of more than 100%.
3. Backtesting strategies: The 0DTE Oracle tool helps traders find and backtest 0DTE and next-day trading opportunities. 
4. Monitoring positions: 1-minute Exit Options allow traders to pre-set their management criteria, and bots monitor the positions every minute throughout the day.
5. Automatically exit trades before expiration: Don’t want to hold a trade through the market close? Tell your bot to automatically exit all positions ten minutes before the market closes to mitigate assignment risk.

The Future of SPX 0DTE Trading

In our view, SPX 0DTE options will likely continue to play a significant role in the market as traders look for more frequent opportunities, less overnight exposure, and instant feedback. With growing interest from both retail and institutional traders, the volume of 0DTE contracts is expected to increase in 2025 and beyond. Additionally, we can expect exchanges to add more tickers beyond SPX, SPY, and XSP and may eventually include single-name stocks as demand increases.

In short, 0DTE is here to stay and will continue to grow. If you're not already trading 0DTE, t's time to take a closer look.