0DTE Volatility Surges as Traders Hedge Near-Term Market Risks

• 0DTE options are being used more frequently to manage volatility around macroeconomic and geopolitical events due to their ability to align expiration dates with key announcements according to market analysis.
• The popularity of these instruments is driven by enhanced flexibility from platforms like Futu and Moomoo, which offer more frequent expirations, improving short-term strategy effectiveness as reported by industry sources.
• Cboe's 0DTE options accounted for 59% of SPX volume by early 2026, highlighting the growing institutional and retail adoption of ultra-short-term instruments according to financial data.

Traders are increasingly using 0DTE options to hedge or speculate on volatility events like CPI/PPI data and Fed announcements. These instruments align expiration with key macroeconomic event dates, reducing exposure and enabling precise risk management. The popularity of 0DTE options is driven by their ability to improve strategy effectiveness and reduce exposure, as reported by CME Group. These options allow traders to manage exposure to rapidly changing macroeconomic and geopolitical risks according to market analysis.

The increased frequency of options trading, facilitated by platforms like Futu and Nasdaq, is enhancing flexibility for managing short-term market exposure. Traders and investors are gravitating toward 0DTE options due to the increased trading frequency and enhanced alignment with key events. These tools allow for more responsive portfolio management and are useful for managing exposure to rapidly changing macroeconomic conditions as industry reports indicate.

Cboe has optimized its SPX weekly options to cater to the 0DTE craze. 0DTE contracts accounted for 59% of SPX volume by early 2026, reflecting the growing demand for short-term volatility management. This shift is part of a broader trend toward retail and institutional adoption of ultra-short-term instruments for capturing volatility opportunities according to market analysis.

How are 0DTE options used in managing volatility around key macroeconomic events?

0DTE options are designed to align with key macroeconomic event dates, allowing traders to hedge or speculate on CPI/PPI data and Fed announcements. These options reduce exposure and improve strategy effectiveness by aligning expiration with event dates according to market analysis. Traders use these instruments to fine-tune risk management and hedge against Fed announcements or CPI data according to market analysis.

E-mini S&P 500 options provide diverse expirations and liquidity, enabling efficient hedging and trading strategies. The product's physical settlement and portfolio margin efficiency enhance capital utilization. These options offer varied expirations, including intraday 0DTE options and long-dated quarterly contracts according to CME Group.