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.