Zero-Day Options Cement Presence in Reversal-Ridden Stock Market

The craze for fast-expiring options is ramping to unprecedented heights in a stock market that has lately been given to severe intraday moves. It’s probably not a coincidence.

About 1.86 million so-called zero-day contracts — those tied to S&P 500 with a maturity less than 24 hours — changed hands on Thursday, making up a record 55% of the index’s total volume, according to data compiled by Nomura Securities International. Halfway into August, the options known as zero days to expiration, or 0DTE, have seen four of their top 10 most-traded sessions ever.

Their mushrooming popularity coincides with a ...