This zero-day options craze could finally be coming to popular stocks like Nvidia and Tesla. Here's what to know.

By Joseph Adinolfi

Nasdaq has asked the SEC for permission to list options tied to a handful of popular stocks that would expire on Mondays and Wednesdays

A surge in trading of so-called "zero days to expiry" - or "0DTE" - options has contributed to an options-market boom over the past few years, drawing in both sophisticated investors and amateur speculators.

During the trading week, investors have been limited to trading 0DTE contracts tied to stock-market indexes like the S&P 500 and a handful of popular ETFs, including the Invesco QQQ Trust.

But after a long wait, they could soon be coming for popular stocks such as Nvidia Corp. (NVDA) and Tesla Inc. (TSLA)

In a filing published late last week, Nasdaq Inc. officially asked the Securities and Exchange Commission for permission to expand offerings of option contracts tied to a handful of individual stocks. If the SEC signs off, the exchange would be allowed to list options tied to a select group of stocks that expire on Mondays and Wednesdays, giving traders two more opportunities per week to trade option contracts on the edge of expiration.

"It's probably been a long time in the making," Scott Bauer, CEO of Prosperity Trading and a former floor trader on a major options exchange, told MarketWatch.

Currently, options tied to individual common stocks only expire on Fridays, while contracts tied to some stock-market indexes and highly liquid ETFs have more frequent expirations.

Although a Nasdaq executive declined to comment on the exchange's plans, traders and industry experts who spoke with MarketWatch said that, if all goes well, contracts expiring on Tuesdays and Thursdays could soon follow.

"They're not pure 0DTEs in the sense that they're not listed every day, but it's getting pretty close," Garrett DeSimone, head of quantitative research at OptionMetrics, told MarketWatch.

See: 2024 was another record-breaking year for options trading. What's on tap for the industry in 2025.

What is a '0DTE' option?

Any option due to expire at the end of a session is considered a 0DTE contract. Technically, every option becomes a 0DTE on the last day of its life.

Traders who spoke with MarketWatch have said the appeal of these contracts lies in the small chance of an outsize gain. If the market pushes them into the money before they expire, it could lead to a large windfall for a trader who had bought them minutes or hours earlier.

Back in 2022, popular exchange operators like Cboe Global Markets expanded offerings tied to the S&P 500 and a few popular ETFs to allow traders to trade 0DTE contracts every day of the trading week. The change helped accelerate a boom in options trading that had begun shortly before the COVID-19 pandemic.

The average daily trading volume in these extremely short-dated contracts has been climbing steadily since. 0DTE volumes in S&P 500 index options hit a record during the first quarter of 2025, according to Cboe data.

A Cboe analyst estimated that roughly 50% to 60% of the average daily activity in S&P 500 0DTE contracts involves amateur individual investors, although the exact share is difficult to determine precisely.

Their rise has coincided with a surge in activity across the broader U.S. equity-options market. According to the Options Clearing Corporation, the industry's main clearinghouse, more than 12 billion contracts changed hands in 2024, setting a record for the fifth year in a row.

It appears another record could follow in 2025, with the industry already on track to top 14 billion contracts traded, according to Henry Schwartz, vice president of market intelligence at Cboe.

'We're working closely with everybody'

The SEC has up to 240 days to approve or deny Nasdaq's request once the filing is published in the Federal Register, which had not yet happened as of Tuesday morning. A representative for the SEC didn't return a request for comment from MarketWatch.

Once approved, these options could start trading within days.

Nasdaq's decision to request the change was the culmination of a lengthy process by exchanges, brokerage platforms, market makers and other options-industry players. The goal was to figure out the best way to introduce more short-dated contracts tied to shares of individual stocks in a manner that would minimize risks for the industry and its customers.

Ultimately, the exchange decided that Monday and Wednesday contracts wouldn't be listed on any day when the underlying company is due to report quarterly earnings. This should help to limit the chances that volatile swings in stocks after the closing bell could complicate trade settlements, a Nasdaq representative said.

"We're working closely with everybody to make sure we're doing this in a safe and responsible way," said Greg Ferrari, a senior vice president at Nasdaq within the market platforms division.

The changes proposed by Nasdaq would only allow Monday and Wednesday expirations for a handful of stocks and one additional ETF. As of January 2025, only contracts tied to Nvidia, Tesla, Apple Inc. (AAPL), Microsoft Corp. (MSFT), Broadcom Inc. (AVGO), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META) and Amazon.com Inc. (AMZN) would be eligible for the Monday and Wednesday listings, along with the Financial Select Sector SPDR Fund ETF XLF.

'Lottery tickets'

Options-market activity has been trending toward shorter-dated contracts for years, said OptionMetrics' DeSimone.

At the same time, the advent of free-to-trade electronic brokerages has helped inspire a new generation of amateur individual investors to try their hand at options trading.

Making it easier to trade 0DTE tied to individual stocks could accelerate both of these trends, DeSimone said. While institutional players still dominate index options, individual traders are more active in the single-stock space, DeSimone said.

DeSimone cautioned that anybody interested in trading these products should keep their risk profile in mind. Some in the industry have likened 0DTE contracts to "lottery tickets" that offer a small chance of a large payout, and a high likelihood that the contract will expire worthless.

JJ Kinahan, CEO of IG North America, parent of brokerage tastytrade, pushed back against this characterization, calling it hyperbolic. He said many investors trade 0DTE options as part of spread strategies involving more than one contract, allowing them to more precisely manage their risk. Nasdaq and others have said that 0DTEs can help large traders more tactically manage their risk.

"I think people are excited for the opportunity, but again I think we'll need to do some more education regarding exercise and assignment risk," Kinahan said. "We have to continue to educate as to what the risks of these are, especially after the close."

-Joseph Adinolfi

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