Zero-day trading in options tied to the S&P 500 index boomed in popularity during the coronavirus pandemic. Trading a contract on the day it expires is known as zero-day trading and can be used to bet on or hedge against extremely short-term market moves. Options contracts give investors the right to buy or sell an asset at a fixed price by a given date. Nasdaq this week listed a series of new options contracts tracking some of the most popular exchange traded funds investing in gold, silver, natural gas, oil and long-term Treasuries. Trading in a controversial type of derivative known as “zero-day” options is spreading to Treasury and commodity markets, as Nasdaq and other exchange groups try to replicate a boom that has transformed trading in US stock indices. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
