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Pro Traders and Algorithms Have Overrun the Fast-Twitch Option Market

  • Frenzy trading in 0DTE options goes beyond retail: JPMorgan
  • Just 5.6% of all such volume in past month from day traders
RF trader

Photographer: Sarinya Pinngam/EyeEm/Getty Images

While it might look like a reprise of meme-era excess, the 2022 boom in very-short-lived index options is more than a retail phenomenon. 

So say JPMorgan Chase & Co. strategists including Peng Cheng, whose team studied public trading data and found that small-fry investors can’t be responsible for the explosion of S&P 500 contracts that mature within 24 hours, a category known as zero day to expiry, or 0DTE.