What Stocks Have Daily Options & How to Find Them
Explore what daily options are, how they function, and where to find the underlying stocks that offer these short-term instruments.
Daily options, often called zero days to expiration (0DTE) options, are financial contracts that expire at the close of the trading day they are purchased. They allow capitalizing on very short-term market movements. Unlike monthly or weekly options, daily options have an extremely compressed timeframe. This rapid expiration cycle makes them sensitive to immediate market shifts and time decay.
Understanding Daily Options
Daily options expire at the end of the trading day they are initiated. In contrast, monthly options expire on the third Friday of each month, and weekly options expire on Fridays. Their immediate expiration makes them ideal for those focusing on intraday market events.
Daily options are highly sensitive to daily market volatility due to their short lifespan. Most equity and exchange-traded fund (ETF) options are physically delivered upon exercise. Many index options, such as those on the S&P 500 (SPX), are cash-settled.
Identifying Stocks with Daily Options
Stocks offering daily options share characteristics like high trading volume and large market capitalization, often as components of major market indices. Highly liquid, broad-market indexes and ETFs are often associated with same-day expirations, providing tight bid-ask spreads and deep volume. Examples include options on the S&P 500 Index (SPX), the SPDR S&P 500 ETF Trust (SPY), and the Invesco Nasdaq 100 Trust (QQQ).
Individuals can use several resources to identify these. Brokerage platforms provide tools to search or filter for options with specific expiration dates, such as “0 DTE” or “expiring today.” Financial news websites and data providers also list options chains, allowing users to filter by expiration. Major options exchanges, like the CBOE, list available options and their expiration cycles. The availability of daily options can evolve, influenced by market demand and the liquidity of the underlying asset.
Key Considerations for Daily Options
Daily options have unique characteristics due to their extremely short lifespan. Rapid time decay (Theta) is a key aspect. Theta measures the rate at which an option’s value erodes as it approaches expiration; for daily options, this decay accelerates in the final hours. This means an option’s value can quickly diminish even if the underlying asset’s price remains stable.
Their heightened sensitivity to price movements in the underlying stock is measured by Gamma. Gamma indicates how much an option’s Delta changes for a $1 movement in the stock price. For daily options, Gamma is highest for at-the-money options and accelerates as expiration approaches, leading to sharp changes in Delta. This makes their value highly responsive to small shifts in the underlying asset’s price.
Liquidity is also a consideration. While underlying stocks may be highly liquid, the options contracts themselves can vary. Liquidity is assessed by daily trading volume and open interest. Higher volume and open interest indicate a more liquid market, facilitating easier entry and exit with tighter bid-ask spreads.
Daily options are susceptible to immediate news or events, as there is minimal time for market reactions to unfold. News, such as economic reports or company announcements, can cause rapid price movements that directly impact the option’s value within its short timeframe.