Business & Finance
10 March 2023, 2:55 pm 1 minute
| Reuters reported exclusively that a recent explosion in trading in a type of equity derivative security has prompted Wall Street players and a major clearing house to examine potential risks. The so-called zero day to expiry options (0DTE), which refers to contracts that expire in less than 24 hours, offer retail and institutional traders a relatively cheap, though high-risk, way to bet on intra-day swings in stock prices. |
Market Impact
Many 0DTE options have a low probability of rising in value as they approach expiration. However, small changes in the price of the underlying stock or index can cause their prices to also change. A large intraday market move could cause contracts to suddenly rise in value and expose their sellers to increased risk of big losses.
Article Tags
Topics of Interest: Business & Finance
Type: Reuters Best
Sectors: Business & Finance
Regions: Americas
Countries: United States
Win Types: Exclusivity
Story Types: Exclusive / Scoop
Media Types: Text
Customer Impact: Significant National Story
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2: https://www.reutersagency.com/en/reutersbest/article/wall-street-examines-risks-around-short-dated-options-as-warnings-rise/
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