Robinhood's Expansion and Trump's Policies Fuel Record-Breaking Zero-Day Options Surge

Wall Street Sees Unprecedented Demand for zero-day options Amid Market Turbulence
Contracts expiring within 24 hours have reached a historic high, accounting for 56% of the total S&P 500 options volume last month, according to data from Cboe Global Markets Inc. This unprecedented surge is fueled by uncertainty surrounding Donald Trump’s policy decisions and the expansion of zero-day-to-expiration (0DTE) options availability on Robinhood Markets Inc.
The demand for 0DTE options has been on an upward trajectory in early 2025, spurred by erratic policy announcements from Trump’s administration and signs of economic weakness. The S&P 500 has experienced significant fluctuations, with daily reversals of at least 0.5% occurring eight times in just two months. On Monday alone, the index exhibited such movements before stabilizing by midday in New York.
As volatility grips the market, both institutional and retail investors are increasingly drawn to zero-day options, leveraging them for quick profits or as a hedge against unpredictable swings. To meet rising interest, Robinhood expanded access to index options trading in January, broadening its appeal to a wider audience.
“The surge in 0DTE volumes reflects increased intraday volatility but is largely driven by wider accessibility, particularly with Robinhood now offering index options to all users,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets Inc.
The extent of this trading frenzy was evident last Friday when the S&P 500 oscillated between losses and gains amid market reactions to a dip in consumer spending and a tense exchange between Trump and Ukrainian President Volodymyr Zelenskiy. The session took another turn when U.S. Treasury Secretary Scott Bessent disclosed that Mexico proposed mirroring U.S. tariffs on China, urging Canada to follow suit. This news sparked a late-session rally, with the S&P 500 closing up 1.6%.
During Friday’s volatile session, zero-day contracts tied to the S&P 500 saw a staggering $1.4 trillion in notional value change hands, nearing an all-time high recorded just a week earlier, according to derivatives analytics firm Asym 500.
The growing prominence of 0DTE options has ignited debate on Wall Street regarding their broader market implications. While Bank of America’s derivatives strategists dismiss concerns of a repeat of 2018’s volatility collapse, arguing that the ecosystem remains stable, others are questioning the impact of these ultra-short-term trades.
Rocky Fishman, founder of Asym 500, pointed to the correlation between increased 0DTE trading and heightened market swings. “The rise of zero-day options aligns with rapid news-driven market reactions, raising the possibility that elevated option activity is amplifying intraday volatility,” he noted.
As market conditions remain unpredictable, the role of zero-day options in shaping intraday volatility and broader market trends will be closely scrutinized in the months ahead.