How to Trade Zero Day Options

How to Trade Zero Day Options

Posted On February 14, 2023 11:05 am

They’re back! The speculative trading frenzy that dominated the markets’ during 2021, and then went into hibernation during the 2022 bear market has reemerged.

The piling into meme names, FOMOing, YOLOing, bidding up shares of money losing companies, even those bordering on bankruptcy, and squeezing shorts with single day moves in excess of 20% are all there.

And once again its options, especially those with extremely short dated expirations, are the weapon of choice for trying to ride this wave to outsized profits.

The activity has manifested itself in two ways; a surge in call volume vs. puts, makes sense given the incredible start to 2023 which has seen the Nasdaq 100 climb some 15% during the first five weeks. Led by many crowd favorites such as Nvidia (NVDA) and Tesla (TSLA), which have gained over…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.