I thought I’d write something up to be a little more fundamentally educational rather than making guesses on market or stock directions. There is a lot of excitement recently regarding 0DTE (zero days to expiration) options. I don’t intend for this to be an all encompassing educational post, just a general walkthrough of how Options are priced, how they move, and why these particular types of options are so attractive in this trading environment.

What Is An Option?

An Option is a Derivative contract, meaning its value is based on an underlying security. The 2 key features of a contract are its strike price and an expiration date. A Call Option gives the contract owner the right to buy the underlying security at the strike price. A Put Option is the opposite in that the owner of the contract has the right to sell the underlying security at the strike.