Used mainly by high-frequency traders and retail investors, these options offer the prospect of almost immediate and relatively high profits, but with an equally high level of risk. The idea is to exploit intraday variations in indices to generate quick profits - a tactic that particularly appeals to those looking to capitalise on sudden movements.

Since their launch in 2022, 0DTEs have been an impressive success, sometimes accounting for as much as 50% of the total volume of options on the S&P 500, according to JPMorgan data. This success continues to this day, although there are some nuances. For example, when the S&P 500 fell 3% on 7 August, investors preferred longer-term options, seeing them as a more reliable hedge against prolonged volatility. The share of 0DTE options in the volume of options traded fell to 26% during this crisis, compared with an annual average of 48%. This phenomenon shows that, despite their popularity, these ultra-short options are not seen as an ideal hedging tool in stressed market conditions.

0DTEs are inherently volatile, and some experts fear that they could, in specific circumstances, affect the stability of major indices such as the S&P 500. So far, the disruptions have not been as pronounced as some had feared, but caution is still warranted. Some analysts warn that these options have the potential to amplify volatility in the event of a market crisis. For example, the combination of strong take-up of 0DTEs and other products such as 0DTE ETFs could trigger a volatility crisis similar to the ‘Volmageddon’ of 5 February 2018. For the record, that day was marked by a sudden spike in market volatility that resulted in the loss of more than 90% of the value of some short-volatility ETP products. In other words, if these products are used disproportionately in panic situations, they could exacerbate market movements rather than stabilise them.

Unlike indices, which are diversified by nature, the shares of these companies are more sensitive to sudden fluctuations. The 0DTE applied to individual stocks could significantly increase the volatility of these securities, especially for companies already known for their sensitivity to market movements, such as Tesla. A spike in volatility could lead to instability not only in their share price, but also in the markets' perception of them - a crucial factor for large-cap companies that need to maintain investor confidence and a degree of stability. This raises the question of the appropriateness of offering this type of option on individual high-risk securities.

This type of option feeds strategies focused on quick gains and increases volatility, which can make markets more fragile. Critics argue that this accentuates excessive speculation, to the detriment of a long-term view, posing challenges for both companies and investors over the long term. Ultimately, the perception of this trend towards the ultra-short term is mixed: it meets the needs of speculators but worries those who fear that markets are becoming increasingly prone to instability.

Because of their speed and high leverage, these options could indeed trigger flash crashes in certain circumstances. For example, if a critical mass of investors decides to sell or buy 0DTEs in a panic, this could trigger chain reactions in the market. With the rise of high-frequency trading technologies, the risk of snowball effects is heightened, underlining the importance of increased regulation and oversight of these products. The authorities will probably need to take a closer look at this segment to ensure that innovation does not compromise the overall stability of the financial system.