High Risk Warning
0DTE options are extremely high-risk instruments. They can lose 100% of their value within minutes. Only trade 0DTE with capital you can afford to lose entirely, and never allocate more than a small percentage of your account to any single 0DTE trade.
Zero Days to Expiration (0DTE) options have exploded in popularity. The allure is obvious: massive percentage gains are possible when you catch the right move. But 0DTE is also a graveyard for traders who don't have a systematic approach.
Why 0DTE Is Different
0DTE options behave differently than options with more time value:
- Extreme gamma: Small price moves create outsized option price changes
- Rapid theta decay: Time value evaporates throughout the day
- Directional binary: You need to be right about direction quickly
- Volatility sensitivity: IV changes hit 0DTE options hard
These characteristics make timing critical. A great entry 30 minutes too early can still result in a complete loss.
The VLM 0DTE Framework
Setup Selection Criteria
Not every VLM signal is appropriate for 0DTE. We look for:
- Session context: Best setups occur during high-volume windows (9:30-10:30 AM, 2:00-3:30 PM ET)
- Liquidity sweep confirmation: A visible sweep of a key level before the signal
- Clean signal: No conflicting signals on nearby timeframes
- Sufficient move potential: At least 5-10 points of room to the next structure level
Entry Protocol
When VLM signals and criteria align:
- Wait for the signal candle to close (don't anticipate)
- Enter slightly ITM or ATM options—avoid far OTM in 0DTE
- Use a fixed dollar amount, not a percentage of account
- Set immediate stop-loss at 50% of premium paid
Position Management
0DTE requires active management:
- First target: Take 50% off at 100% gain (you're now playing with house money)
- Runner management: Trail stop to breakeven after first target hit
- Time stop: Exit remaining position by 3:30 PM unless in strong profit
- Never hold to expiration: Close all positions by 3:45 PM at the latest
The 50% Rule
Our core 0DTE risk rule: Never risk more than you're willing to lose entirely, and use a 50% stop on every trade. This means if you buy $500 in options, you exit if the position drops to $250. No exceptions.
Best Times for 0DTE
Opening Range (9:30-10:30 AM)
The morning session offers the highest probability setups. Look for VLM signals after the initial 15-30 minute range establishes. Avoid the first 5 minutes—let the opening chaos settle.
Power Hour (2:00-3:00 PM)
The afternoon push often provides clean directional moves. Institutional traders make their end-of-day positioning decisions, creating sustained moves that 0DTE options can capture.
Times to Avoid
- 11:30 AM - 1:30 PM: Lunch lull—choppy, directionless
- FOMC days: Wait until after the 2:30 PM release and initial reaction
- Major economic data: Let the dust settle before entering
Strike Selection
For 0DTE, strike selection is crucial:
- ATM or 1 strike ITM: Higher delta, moves with underlying more reliably
- Avoid far OTM: Despite lower cost, the probability of profit is significantly lower
- Delta target: Look for 0.40-0.60 delta at entry
A common mistake is buying cheap OTM options hoping for a lottery ticket. With 0DTE, you need the underlying to move quickly and significantly. ITM/ATM options give you a fighting chance.
Quality Over Quantity
The best 0DTE traders take 1-2 trades per day maximum. They wait for the setup that checks all the boxes rather than forcing trades. Patience is your edge in 0DTE—the market offers enough opportunities that you never need to force one.
What to Avoid
- Averaging down: If your 0DTE trade is going against you, adding size is doubling down on a mistake
- Revenge trading: A morning loss doesn't mean you should take an afternoon trade to "make it back"
- Size increases after wins: Overconfidence after winning streaks leads to giving back gains
- Holding through events: Never hold 0DTE positions through scheduled news releases