Whenever markets behave in an irrational and unpredictable way, which is most of the time, the search is on to explain what force is working in the background.
A zero-day-to-expiry option, or 0DTE, is similar to any other options, which are well-established trading instruments. The buyer of a call option agrees to purchase a security at a set price some time in the future while the buyer of a put option agrees to sell a security at a set price in the future.
In fact, the major brokers are in disagreement as to how much of the activity has been fuelled by thrill-seeking retail traders compared to sophisticated institutions.JPMorgan analysts said retail investors accounted for less than 5 per cent of trading volume but CBOE derivatives analysts say it’s at least one third.
Could we ever see these curious instruments here? Don’t bet on it. While Australia is at the forefront of developing new techniques to speculate and gamble,are limited to the gaming rooms of pubs and clubs, and on punting apps that live on our mobile phones.