In recent years, the popularity of daily options trading has surged among both retail and institutional investors. Daily options also known as 0DTE options (zero days to expiration) are contracts that expire at the end of the trading day. These instruments offer unique opportunities for short-term traders seeking fast-paced market exposure. Understanding which underlying assets offer daily expiring options is essential for active traders who depend on liquidity, precision, and timing. The list of options that expire daily is not exhaustive but includes some of the most heavily traded equities and indices in the U.S. markets.
What Are Daily Expiring Options?
Definition and Function
Daily options are financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price, with the contract expiring on the same day it is purchased. Unlike traditional weekly or monthly options, daily options are designed for ultra-short-term strategies. They are often used for scalping, hedging short-term positions, or capitalizing on intraday volatility.
Trading Strategy Implications
Due to their brief lifespan, daily options require precise entry and exit timing. Traders often rely on technical indicators, economic data releases, or market news that can move prices significantly within a single session. These contracts are most suitable for experienced traders with a high-risk tolerance and a deep understanding of market dynamics.
Key Benefits of Daily Options
- Short-Term Exposure: Ideal for capturing daily market moves without the need for long-term commitment.
- Lower Premiums: Generally cost less than weekly or monthly options, making them accessible for small accounts.
- Defined Risk: The maximum loss is limited to the premium paid.
- High Liquidity: Many underlying assets with daily expirations are heavily traded, offering tight bid-ask spreads.
List of Underlying Assets with Daily Options
Major Index Options
Some of the most liquid daily options are tied to stock market indices. These products are ideal for traders who want to speculate on or hedge broad market movements.
- SPY (SPDR S&P 500 ETF): One of the most actively traded ETFs, offering daily options Monday through Friday.
- QQQ (Invesco QQQ Trust): Tracks the Nasdaq-100 Index, also with daily options availability.
- SPX (S&P 500 Index): A cash-settled index with daily options expiring every trading day.
- NDX (Nasdaq-100 Index): Provides daily expirations similar to SPX for more advanced traders.
- DJX (Dow Jones Industrial Average Index): Offers daily expirations for exposure to the Dow Jones Industrial Average.
Single-Stock Options
Although less common than index options, a growing number of individual equities are beginning to offer daily expiring options. These typically include highly liquid large-cap stocks.
- TSLA (Tesla Inc.): One of the most volatile and heavily traded stocks with intraday movement suitable for daily options.
- AAPL (Apple Inc.): High liquidity and market capitalization make Apple a favorite among daily options traders.
- AMZN (Amazon.com Inc.): Offers consistent price swings and strong daily volume.
- MSFT (Microsoft Corp.): Another blue-chip stock with an active options chain supporting daily expiration.
- NVDA (NVIDIA Corporation): Known for its sharp intraday moves and popularity among tech traders.
Exchange-Traded Products (ETPs)
Besides equity indices and individual stocks, several ETPs provide daily options due to their inherent volatility and strong trading volume.
- VIX Options (CBOE Volatility Index): Provides exposure to market volatility, with daily expirations on select contracts.
- UVXY (ProShares Ultra VIX Short-Term Futures ETF): Frequently used for short-term bets on volatility.
- XSP (Mini-SPX): Offers exposure to the S&P 500 in a smaller contract size with daily options availability.
Market Hours and Expiration Timing
Daily options expire at the end of the trading session on the day they are purchased. Traders need to be aware of the cut-off times for exercising and settling options. Most U.S. equity markets close at 4:00 PM Eastern Time, but index options such as SPX may have earlier or end-of-day settlement times depending on the exchange.
Cash-Settled vs. Physically Settled
Daily index options like SPX and NDX are typically cash-settled, meaning that no shares change hands upon expiration. Single-stock options like AAPL or TSLA are physically settled, which means the buyer may receive or deliver the actual shares if the option is exercised. Understanding this difference is crucial for managing positions properly.
Risk Considerations with Daily Options
While the fast-paced nature of daily options appeals to many traders, it comes with high risks. The limited time frame allows little room for error. If the underlying asset does not move in the expected direction within the trading day, the option can quickly lose value and expire worthless. Traders must also consider transaction costs and the potential for slippage due to rapid price movements.
- Time Decay: Daily options suffer from rapid time decay, with value eroding quickly as expiration approaches.
- High Volatility: Sudden intraday moves can trigger significant gains or losses within minutes.
- No Overnight Protection: These options offer no exposure beyond the current trading day, limiting use for swing trading.
Choosing the Right Daily Option to Trade
Traders selecting from the list of daily expiring options should consider several key factors, including liquidity, implied volatility, and personal risk tolerance. For example, SPY and QQQ are excellent starting points due to their tight spreads and deep options markets. More advanced traders may explore SPX or NDX for tax-advantaged cash settlement or size flexibility.
Indicators and Tools
Successful daily options traders often rely on a combination of tools, including:
- Moving averagesfor trend direction
- Volume and open interestfor assessing liquidity
- Options Greekslike delta and theta to understand sensitivity to price and time
- News calendarsto prepare for economic events or earnings releases
The availability of daily options has expanded the possibilities for traders looking to capitalize on short-term market movements. From broad market indices like SPY and SPX to popular stocks such as TSLA and AAPL, there is a growing list of options that expire daily. While these instruments offer flexibility and affordability, they also carry heightened risk and demand a disciplined approach. Traders must be fully informed about the mechanics of daily expiration and carefully select the right underlying asset based on strategy, timing, and market conditions. As the market evolves, it’s likely that even more stocks and ETFs will adopt daily options, providing greater opportunities for nimble and informed investors.