Chief Options Strategist explains this novel category in options trading and how they differ from traditional monthly options
Zero day to expiry (0DTE) options, more commonly understood as daily options, only became a feasible vehicle on options markets around 2022. Over the past four years, however, the volume of 0DTE options has skyrocketed. In summer of 2025, 0DTE options represented 62.4 per cent of the total S&P 500 index options traded. These options contracts, trading at a far greater velocity than their traditional monthly counterparts, are a rapidly growing segment of the options market.
Hamilton ETFs is diving into 0DTE options. The Toronto-based ETF issuer has been a longstanding proponent of covered call option equity ETFs, and has rolled out a series of funds using 0DTE options. Nick Piquard, Chief Options Strategist at Hamilton ETFs, explained why they’re using these contracts, what they offer investors, what their tradeoffs are, and how advisors can approach the emerging strategy.
“It’s a different way to monetize volatility,” Piquard explains. “The nice thing about selling the daily options that you’re getting so much more premium because time decay accelerates as you get closer and closer to expiry. When you’re selling an option every day you’re going to be able to collect a lot more premium…The trade off, of course, is that now you have to worry about what the market’s going to do on a daily basis. Whereas before you could just come back in a month and see where things were at. Now you’re monitoring this position every day. So it’s quite a bit more work.”
How 0DTE fits in the call options tradeoff
Covered call option writing inherently trades off upside for premiums, which can be paid out as income. That exchange is relatively straightforward and widely understood. While Hamilton ETFs writes options every day on their 0DTE strategies, capping potential upside during each trading day, Piquard notes a particular advantage for these strategies relative to a monthly expiry: they participate overnight.
Piquard explains that often some of the most significant stock moves occur after market hours, as futures markets take over and key news pieces like earnings reports, technological developments, and leadership appointments tend to come out after 4pm eastern. On a daily options strategy, the option contract was written during market hours and resolved during market hours, the strategy remains exposed to any upside that occurs after market hours.
Active writing can also help with upside exposure during volatile periods. Options premiums generally rise with market volatility and Piquard says that 0DTE option premiums tend to adapt to volatility very quickly. As those premiums rise in volatile periods, to the upside or downside, Piquard and his team can elect to write fewer options to generate the necessary premiums for their strategy, allowing for more upside potential.
Managing costs and finding suitability
Writing daily options contracts comes with an innately higher cost, simply due to the sheer volume of transactions. Piquard explains that his team seek to manage those costs by only writing 0DTE covered call options on the most liquid indices: the S&P 500 and the NASDAQ 100. Piquard gives the example of one Hamilton 0DTE ETF that writes options on an exposure to the NASDAQ 100. That ETF needs to write about 15 contracts per day, at a cost of $1 (USD) per contract. $15 per day on 250 trading days amounts to $3,750 in costs for a $332 million ETF. Piquard limits the 0DTE options trading for all of Hamilton’s daily option funds to those highly liquid options markets where transaction costs are as low as possible.
There is also leverage at work in Hamilton’s 0DTE options ETFs. The ETFs hold a 100% exposure to a different ETF, usually issued by Hamilton, and add roughly 25% leverage, which is then used to buy exposure to a large S&P 500 or Nasdaq 100 ETF. 0DTE options are sold on that additional exposure purchased through leverage.
Piquard doesn’t argue that 0DTE options strategies are inherently superior to their monthly counterparts. Instead, he believes that a balance between the two can help income-oriented investors. He stresses the capacity for options to “monetize volatility” and outlined how he positions these ETFs for advisors.
“For a lot of advisors this would be considered an alt because of the modest leverage. So it’s never going to be a huge portion of the portfolio. But because the yields on these products are going to be higher, you also don’t need to own a lot of it to make a big difference in the income needs of your client,” Piquard says. “You’re getting very tax efficient income and you’re monetizing volatility in a slightly different way.”
