0DTE
Contracts expiring today. All their value is extrinsic and burns in hours: the fastest-moving and the least forgiving.
In the chapter
IIITime
The only factor that runs one way
From the same chapter
- DTEHow many days the contract has left. It is the number that decides how much time weighs against direction.
- Time decayThe daily loss of extrinsic value. Not linear: it accelerates towards expiration and is brutal in the final week.
- Quarterly expirationThe third Friday of March, June, September and December, when options and index products expire together. It concentrates volume and tends to move the market.
- RollingClosing a contract and opening the same one at another expiry or strike. It does not fix a wrong thesis: it buys time, and time costs money.