The Rise of 0DTE Options

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It was 4:30 a.m. on a summer morning in 1990. A young Mike Green stepped through the World Trade Center on his way to the crude oil trading pit. He was still in college at the University of Pennsylvania, working as a market maker on the New York Mercantile Exchange. It was the kind of job where you had to learn quickly.

There were no smartphones. No email. No Twitter breaking news. Just the rustle of a printed newspaper.

“The way I learned that Saddam Hussein invaded Kuwait,” Green recalls, “I happened to see the headline on the newspaper. And the thought that went through my mind was, I better run the option sheets extra wide.”

In his first few days on the job, Green was at the center of a geopolitical shock that would send oil prices soaring and ripple through global markets. It was a crash course in how real-world events collide with market systems and how important it is to react, even when you don’t have all the information.

That moment—intense, unexpected, and formative—helped shape the instincts Green would rely on throughout his career. He learned early that markets are complex systems where preparation matters more than prediction, and reflexes often outperform spreadsheets.

That experience of witnessing a global crisis from inside the financial system instilled in Green a respect for how fragile and reflexive markets can be. Today, he believes we’re approaching another inflection point. But this time, it’s not coming from a bombshell headline. It’s creeping in quietly through the plumbing of the market itself.

The Rise of Zero-DTE: Same-Day Options, Maximum Fragility

Green dives deep into one of the most consequential shifts in modern market structure: the rise of zero-days-to-expiration options, or Zero-DTEs. These instruments, once a niche tool for tactical traders, now dominate daily options activity, making up over 60% of the volume.

“By far the most successful product launch I’ve ever seen,” Green says.

Zero-DTEs are options that expire the same day they’re traded. What was once a quarterly game—where traders positioned around earnings reports or Fed meetings—has become a daily battleground. With same-day expiration comes higher leverage, shorter timeframes, and thinner margins for error. And it’s not just retail traders anymore. Institutions are playing this game too.

These options are no longer just reacting to price. They’re shaping it. Ultra-short-term flows are now influencing volatility, liquidity, and direction in real time. In other words, the market is increasingly driven by its structure, not by long-term fundamentals.

That structural shift brings new risks, notes Cem Karsan, the Founder and Senior Managing Partner of KAI Volatility Advisors.

“Once these things start to unwind, given the leverage, sometimes the door's not big enough,” Karsan says. “And all that matters is the positioning. That Mag 7, passive investing, I can't think of a bigger, more leveraged, one-sided positioning.”

Passive Investing, Crowded Trades, and the Illusion of Control

In reflexive systems, prices impact positioning, which feeds back into prices, creating a loop. That’s why markets tend to fall even when the economy appears stable. It’s not about fundamentals. It’s about flow. Green says it’s about who has to unwind what and whether there’s anyone left on the other side of the trade.

When everyone is positioned similarly, minor disturbances can trigger large, cascading moves. Liquidity vanishes, and the illusion of control evaporates. And that illusion, Green argues, is central to how most people think about investing today.

“We have to admit that we’re increasingly collectivist in nature,” he says. “And yet we all imagine that we are individually empowered in this framework.”

It’s a consequential contradiction. We talk about “my portfolio” and “my investment decisions,” but most investors are riding the same wave. The rise of passive investing means that millions of people are exposed to the same stocks in the same proportions, through the same ETFs, run by the same algorithms.

The collective nature of this system creates crowding that’s both invisible and potentially dangerous, especially with the Magnificent 7 and passive investing.

“It was a super popular concert, but now we’re all trapped inside the stadium,” Green says.

Everyone came for the show as Apple, Microsoft, Nvidia, Google, Meta, Amazon, and Tesla soared in valuation. But now that the performance is potentially over, the exits are clogged. There’s no liquidity on the other side. Green says if these names fall, there might not be anyone to take the other side of the trade.

From Crypto to AI: The Fight for Sovereignty in a Collective System

This isn’t just about stocks, it’s about a deeper desire for control in a world that feels increasingly unstable to some. That desire, Green says, is partly what fuels the appeal of things like crypto and AI.

“It’s actually interesting when I run the scenarios with ChatGPT,” he says. “It highlights crypto as an individualistic trait and the potential for concealing your wealth from the group.”

To Green, Bitcoin and other decentralized assets represent an effort to reclaim autonomy. He was an early believer in the idea. But even here, the dream of sovereignty collides with reality.

“Can we allow the old world to die before the new one is born?” he asks. “I’m not sure.”

Governments and institutions aren’t stepping aside. They’re pushing back. Green points to a recent proposal in Europe to confiscate $10 trillion in private wealth to fund military spending as a stark reminder: the rules can, and do, change, especially when systems are under stress.

It’s not just the rules that have changed. The very nature of trading has transformed. Green’s early days involved printing out sheets by hand, installing math coprocessors into Intel 8088s, and buying extra RAM from PC Richards. Today’s markets are hyper-digital, governed by algorithms, and operate at near-instant speed.

That speed makes things more efficient, but also more fragile. When reflexive flows dominate, reversals become sharper, windows to act become shorter, and the margin for error shrinks dramatically. “We all talk about national politics,” Green says. “We don’t talk about our local politics. We’ve moved into these realms where we’re increasingly collectivist in nature.”

That same shift, from the individual to the collective, from analog to digital, is mirrored in how markets behave. They’re no longer just complex systems. In some ways, they resemble simulations, reacting to identical signals and producing exaggerated, patterned responses. Green doesn’t say the word “simulation” outright. He doesn’t need to. The implication is clear: our markets are no longer just mirrors of the economy. They’ve become self-contained systems, looping, reflexive, and increasingly fragile.

And yet, the answer isn’t to retreat from them. It’s to understand them better.

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This is based on the debut episode of You Got Options, a new podcast from Top Traders Unplugged. Sign up for our Newsletter or subscribe on your preferred podcast platform to avoid missing out on future episodes.