Zero days to expiration (0DTE) options are options contracts that are traded on the same day that the contract is due to expire. If buying a long option contract in a 0DTE, there’s a risk of losing the premium spent if the trade goes against you in the shorter trading window.

Another risk is that option prices are composed of time value (theta) that degrades over the life of the option. The closer they come to expiring, the more the price of the option will decline. This is known as time decay (also referred to as “theta decay”) and is at its highest for 0DTE options.

0DTE options are generally more suited for experienced investors who understand the risks involved.