Odd Lots
Transcript: What the Boom in Zero-Day Options Means for Stocks
A stabilizing or destablizing force?
A trader looks over computer monitors as he works in the Cboe Volatility Index (VIX) pit on the floor of the Cboe Global Markets, Inc. exchange in Chicago, Illinois, U.S., on Wednesday, Feb. 14, 2018.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Recent months have seen an explosion in so-called 0DTE options. These equity derivatives are highly volatile and short-term in nature. And they’re proving to be popular with retail traders and professional portfolio managers. But are they a source of potential systemic risk? Could they create a volatility doom loop? On this episode, we speak with Nomura cross-asset strategist Charlie McElligott about the phenomenon. The transcript has been lightly edited for clarity.