Nvidia Zero-Day Options: The Next Big Bet for ETF Upstart

Nvidia (NVDA) has been on a tear lately, and Matt Tuttle, the ETF industry's upstart-in-chief, is betting big on the company's zero-day options. Tuttle, who struck gold with leveraged meme-stock funds but fell flat with his Jim Cramer ETFs, has filed to create a line of new offerings that will trade fast-twitch derivatives on popular companies beloved by the retail-investing masses. Think Nvidia Corp., Tesla Inc., MicroStrategy Inc., and more.

The gamble? Publicly traded single-stock options aren't available on a daily basis, meaning 0DTE bets can currently only occur on a Friday when weekly options expire. But Tuttle is betting that the market for zero-day options is ripe for expansion, and he's not alone. The options market has been booming in recent years, with the introduction of new products and the growth of retail investing. In 2022, the options market saw record trading volumes, and the trend shows no signs of slowing down.

Tuttle's new ETFs will employ a covered call strategy, selling out-of-the-money zero days to expiry ("0DTE") call options on popular companies to generate income each morning and provide overnight exposure to the underlying stocks. This strategy allows investors to capitalize on the growth potential of these companies while mitigating some of the risks associated with options trading.

But what about the risks associated with publicly traded single-stock options, which are not available on a daily basis? Tuttle aims to mitigate these risks by introducing a new line of offerings that will trade fast-twitch derivatives on popular companies. These offerings will be available for trading on a daily basis, allowing investors to participate in the options market more frequently and potentially reduce the risk of missing out on favorable trading opportunities.



Retail investors can play a significant role in the expansion of zero-day options, as they have shown increasing interest and participation in options trading in recent years. As the market for zero-day options grows, retail investors may find these instruments appealing due to their potential for generating income and hedging portfolios. However, their participation also comes with risks, such as increased market volatility and the potential for losses if not managed properly.

The impact of retail investors on the broader market can be both positive and negative. On the one hand, their increased participation can lead to greater liquidity and depth in the market, making it easier for other investors to enter and exit positions. Additionally, retail investors can bring new ideas and perspectives to the market, driving innovation and growth. On the other hand, their inexperience and overconfidence can lead to irrational decision-making, contributing to market bubbles and crashes.

In the context of zero-day options, retail investors' participation could potentially amplify market movements, as these options are highly sensitive to changes in the underlying asset's price. This increased sensitivity could lead to more volatile market conditions, particularly around earnings reports and other high-impact events. However, if managed responsibly, retail investors' involvement in zero-day options could also provide valuable liquidity and help to smooth out market fluctuations.

To mitigate the risks associated with retail investors' participation in zero-day options, it is essential to provide them with adequate education and resources. This includes clear and concise information about the risks and rewards of these instruments, as well as guidance on how to manage and trade them effectively. By doing so, retail investors can contribute positively to the expansion of zero-day options and the broader market, while minimizing the potential negative impacts.

In conclusion, Nvidia zero-day options present an exciting opportunity for ETF upstart Matt Tuttle and retail investors alike. By employing a covered call strategy and mitigating the risks associated with publicly traded single-stock options, Tuttle's new ETFs could capitalize on the growth potential of popular companies while providing investors with a valuable income-generating tool. However, it is crucial for retail investors to approach zero-day options with caution and a solid understanding of the risks and rewards involved. With proper education and responsible management, retail investors can play a significant role in the expansion of zero-day options and the broader market.