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Most traders think 0DTE is just "fast options trading." |
They're missing the real story. |
The real story is gamma. |
And when gamma flips, everything changes. |
Positive Gamma = Sticky Markets |
In positive gamma environments, dealers are net long gamma. |
Their hedging dampens volatility. |
When markets move higher, dealers sell futures to stay delta-neutral. |
When markets move lower, dealers buy futures. |
This creates the "sticky" price action we see constantly. |
Markets that grind slowly with frequent reversals at technical levels. |
CBOE's study shows 0DTE gamma is positive approximately 75% of trading days, reducing volatility by 0.19-2.1 percentage points daily. |
This explains extended low-volatility periods despite massive 0DTE volume. |
Negative Gamma = Explosive Moves |
But the other 25% of days tell a different story. |
When gamma flips negative, dealers become net short gamma. |
Their hedging amplifies rather than dampens moves. |
These negative gamma days boost volatility by up to 3.3 percentage points daily. |
Or 6.4 percentage points in 30-minute windows. |
Real Example |
One documented case: |
20-point SPX drop after a technical break where 0DTE puts trading at $0.30 exploded to $2.10 — 700% gain — within minutes. |
Rapid delta hedging forced dealers to sell futures aggressively. |
Amplifying what started as a modest technical break. |
Understanding When Gamma Flips |
These typically occur when markets break through levels where large 0DTE positioning is concentrated. |
Example: |
SPX trading at 6,800 with massive 0DTE call positioning at 6,800 strikes. |
Dealers are likely net short those calls and long gamma. |
But if SPX breaks above 6,800 and approaches 6,825, those calls move deep ITM, forcing dealers to hedge by buying futures. |
This buying pushes SPX to 6,850, creating momentum-reinforcing action. |
These gamma flip points are predictable based on positioning data. |
You Don't Need to Trade Faster |
You need to trade cleaner. |
This Tuesday, December 23rd at 1:00pm ET, I'm hosting DON-DTE. |
My first-ever, dedicated, 100% 0DTE-only training. |
This is how you operate inside same-day expiration markets without noise or panic. |
You'll see: |
• Why 0DTE feels chaotic — and how structure removes that feeling
• What actually matters on a same-day expiration trade
• How busy traders participate without living at their screens
• How serious traders are resetting their approach heading into 2026 |
This isn't another strategy dump. |
It's a simplified framework designed for fast environments, limited attention, and real-world trading constraints. |
Click here to register for DON-DTE |
Markets aren't slowing down. |
But you don't have to speed up. |
You just need a framework. |
To your success, |
Don Kaufman |
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