| 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. |
Business & Finance
Wall Street examines risks around short-dated options as warnings rise
10 March 2023, 2:55 pm 1 minute
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
