This Zero-Day Options Craze Could Finally Be Coming to Popular Stocks Like Nvidia and Tesla: What You Need to Know
In the ever-evolving landscape of stock trading, a significant shift is on the horizon, particularly for options trading enthusiasts. Nasdaq has recently filed with the SEC to allow the listing of options for high-profile stocks such as Nvidia (NVDA) and Tesla (TSLA) that will expire on Mondays and Wednesdays. This could fundamentally reshape how traders engage with these volatile equities.
The Rise of Zero-Day Options (0DTE)
Zero-day options, more commonly known as 0DTE options, are contracts that are set to expire at the end of a trading day. These contracts have exploded in popularity over recent years, drawing in both seasoned investors and a wave of amateur speculators. As of now, these high-strategy plays have primarily been tied to stock-market indexes like the S&P 500 and specific ETFs. With Nasdaq’s latest push, the door is wide open for these trading instruments to be available on individual stocks, which could attract even more participation in the options market.
Nasdaq’s Game-Changing Request
Nasdaq’s request to the Securities and Exchange Commission marks a significant stride in bringing 0DTE options to widely held stocks. Until now, options contracts for individual common stocks have uniformly expired on Fridays. The introduction of twice-weekly expirations could create an unprecedented trading environment, enhancing liquidity and engagement. Scott Bauer, CEO of Prosper Trading Academy, emphasized that this change has been a long time coming, underscoring the increasing demands from investors for more trading options.
Market Backdrop and Growth Statistics
The options trading landscape has ballooned since the COVID-19 pandemic, showing no signs of slowing down. In 2024, over 12 billion contracts were traded, and 2025 is projected to see a new record broken, with estimates already placing the figure at over 14 billion. This growth can be traced back to the broader acceptance of options as a mainstream investment vehicle, bolstered by the influx of retail investors eager to capitalize on short-term market moves.
According to CBOE data, a staggering 50% to 60% of daily activity in S&P 500 0DTE contracts recently involved individual, amateur traders. This speaks volumes about the changing dynamics of market participation, fueled by the rise of commission-free trading platforms.
How Will This Change Affect Traders?
Nasdaq’s proposal does come with a measured approach—the new Monday and Wednesday contracts would avoid overlapping with companies’ earnings reports to mitigate unexpected volatility. This planned structure aims to protect traders from the extreme market swings that can complicate trading settlements.
However, it’s essential for potential investors to fully grasp the inherent risks associated with trading 0DTE options—often likened to “lottery tickets.” These contracts can provide outsized returns if managed well but can just as easily become worthless with market fluctuations. JJ Kinahan, CEO of IG North America, countered the “lottery ticket” narrative, asserting that many traders utilize strategic spread options to manage risks more effectively.
Conclusion: A New Era for Options Trading
If the SEC approves Nasdaq’s application, we could be standing on the precipice of a new era in options trading. The opportunity for traders to capitalize on short-dated contracts in stocks like Nvidia and Tesla could elevate both their risk and reward dynamics. But as with any investment—especially something as volatile as 0DTE options—education on risks, strategies, and market conditions will be crucial for both novice and seasoned investors alike.
The bottom line: regardless of your viewpoint, one thing is clear—the age of options trading is here, and as responsible investors, we must tread carefully in this burgeoning but complex market landscape.
