Goldman Sachs Blames 0DTE Options for Fueling S&P 500 Selloff

Look closely at the contours of Tuesday’s tumble in the S&P 500 and fingerprints of a new market force come into focus.

They’re options tied to S&P 500 with a maturity less than 24 hours. A flurry of trading in the contracts known as zero days to expiration, or 0DTE, was the backdrop to a jarring acceleration of the day’s decline, one in which the equity benchmark slid roughly 0.4% in 20 minutes, according to Goldman Sachs Group Inc.’s managing director Scott Rubner.

According to Rubner, market makers, whose need to keep books balanced often means they must buy ...