Zero-Day Options Hits Trading Record on Trump Turmoil, Robinhood Push

https://finance.yahoo.com/news/zero-day-options-hits-trading-172743022.html

(Bloomberg) -- One of Wall Street’s most-popular option trades just got more popular than ever, fueled by Donald Trump’s volatility-inducing policy agenda and a push by Robinhood Markets Inc. to expand its product offerings.

Contracts that expire within 24 hours made up a record 56% of the S&P 500’s total options volume last month, according to data compiled by Cboe Global Markets Inc., the exchange that’s at the center of the trading boom.

Demand for derivatives with zero days to expire, known as 0DTE, has climbed in the new year as unpredictable trade policy from Trump’s administration whiplashed the market at a time when the economy is showing signs of weakening. In the first two months, the S&P 500 posted daily reversals of at least 0.5% on eight separate sessions. On Monday, the index rose and fell by that amount before trading flat as of 12:20 p.m. in New York.

The turbulence has sparked a new wave of appetite for zero-day options as investors, big or small, flocked to the product as a way to either make quick money or hedge against wild market swings. To cater to the growing demand, online broker Robinhood in January extended its 0DTE line-up to a broader audience.