Explanation: Large moves in zero-days-to-expiration (0DTE) options.
Pro Tip: These trades are highly speculative but powerful for quick momentum.
Rule of Thumb: 0DTE spikes often exaggerate intraday moves. Follow only if aligned with market trend.
0DTE = Zero Days to Expiration options — contracts expiring today.
A momentum spike is when heavy 0DTE flows (usually sweeps) create sharp intraday moves in the underlying stock or index.
These trades are like day-trading with leverage — ultra short-term, high risk, high reward.
Why do traders care?
● Fast money magnet. 0DTE contracts can turn pennies into dollars in minutes.
● Institutional footprint. Even pros use 0DTE to hedge or push intraday momentum.
● Market impact. Large 0DTE flows can fuel intraday volatility, especially in SPX/SPY.
How to spot it (quick tells)
● Large sweeps at ask in same-day expirations (SPX, SPY, QQQ, TSLA, etc.).
● Sudden surge in volume vs prior day’s normal flow.
● Clusters of trades at nearby strikes (example: SPX 5,000 calls all hitting today).
● Sharp price reaction in underlying within minutes.
Interpreting the intent
● Momentum bets: Traders chasing intraday moves (calls if ripping, puts if dropping).
● Hedges: Institutions hedging against events happening today (Fed announcement, earnings, data release).
● Gamma impact: Dealer hedging activity can amplify these spikes.
Rules of thumb
● “0DTE = lottery with a timer.”
● Great for scalpers, dangerous for holders.
● Size matters. Small 0DTE flows = noise. Large clusters = real potential momentum.
● Watch timing. Early 0DTE spikes often fade; late-day spikes can snowball into close.
● Pair with indices. Most 0DTE fireworks happen in SPX/SPY.
Practical playbook
Day traders: Follow momentum only if confirmed by price action. Exit quickly — these decay fast.
● Risk managers: Avoid oversized bets. Treat 0DTE like lotto tickets.
● Swing traders: Ignore 0DTE noise unless it aligns with broader trend or signals positioning into events.
Quick checklist (0DTE Scan)
● Is it same-day expiry (0DTE)?
● Large sweeps at ask?
● Clustered strikes near current price?
● Did the underlying react immediately?
● Is it a momentum chase or an event hedge?