0DTE Volatility Expands With Increased Trading Hours and Liquidity

• Cboe Global Markets expanded trading hours for Russell 2000 Index options to nearly 24/5, increasing liquidity and execution precision for global investors according to market reports.
• In January 2026, 0DTE options accounted for 23% of Russell 2000 Index options activity, showing a rise in demand for short-term strategies amid increased market volatility as data shows.
• The expansion is part of broader market trends emphasizing real-time execution and flexibility, which has increased trading volume in the Cboe Global Trading Hours session by 27% year-over-year according to analysis.

The recent expansion of 24-hour trading for Russell 2000 Index options is part of a growing trend aimed at improving access and liquidity for global investors. This development allows European and Asian investors to manage U.S. small-cap equity exposure during their local business hours according to market reports. The increased flexibility has led to improved liquidity and reduced execution risk, helping investors hedge, express market views, and generate yield with greater precision.

Market volatility and dispersion are key factors driving the demand for short-term options strategies. In January 2026, the market shifted from a defensive stance with heavy put options at lower strike levels to a bullish outlook by late January, with call options concentrated at higher levels for March and June 2026 expiries as reported. These movements reflect the dynamic nature of investor sentiment and the growing need for tools that offer both protection and upside potential.

The rise of 0DTE options highlights the changing landscape of options trading and investor behavior. With 0DTE options accounting for 23% of Russell 2000 Index options activity in January 2026, investors are increasingly favoring short-term strategies to navigate market volatility. This trend is particularly relevant for income investors, who are looking for alternative ways to generate yield without taking on excessive risk.

Why is 24-Hour Trading Important for Global Investors?

The expansion of 24-hour trading hours is a response to the needs of global investors, who require real-time execution capabilities to manage their exposure effectively. Previously, investors in different time zones had limited access to U.S. small-cap markets during local business hours according to reports. The new trading hours allow for continuous risk management and capital efficiency, ensuring that investors can react to market events promptly.

This development is especially beneficial for investors in Europe and Asia, who can now manage U.S. small-cap equity exposure without being constrained by U.S. market hours. The increased liquidity also supports more precise execution, which is essential for managing risk in volatile markets according to market analysis.

What are the Implications for Income Investors and Covered Call Strategies?

For income investors, the increased use of 0DTE options represents a shift in strategy toward more aggressive and short-term approaches. While these options can generate higher yields, they also come with increased risk, particularly in volatile markets as noted. The article highlights the use of covered call ETFs as a safer alternative for generating high yields without the excessive risk associated with 0DTE options according to the article.

The author of the covered call ETF strategy article expresses concern about the Great Rotation, a potential shift in market dynamics that may challenge the stability of income-focused strategies as reported.