A complete institutional-grade workflow for short-duration options traders.
Trading 0DTE professionally requires discipline, structure, and an understanding of intraday liquidity dynamics.
This routine reflects the daily process used by experienced volatility traders, prop firms, and systematic options desks.
1. Pre-Market Preparation (7:00–9:25 AM ET)
A. Overnight Market Scan
Review:
- ES/NQ/RTY overnight high/low
- Asia + Europe session reactions
- Gap up/down magnitude
- Liquidity pockets and volume nodes
- Trend model for the morning (bullish, bearish, mixed)
B. Major 8:30 AM Economic Data Releases
Many of the most market-moving events occur at 8:30 AM ET, including:
- CPI / Core CPI
- PPI
- Non-Farm Payrolls (Jobs Report)
- Unemployment Rate
- Average Hourly Earnings
- Retail Sales
- GDP
- Jobless Claims
Futures markets absorb the data instantly, often producing 1–3% moves in seconds, IV spikes,
and violent repricing of risk.
When the stock market opens at 9:30 AM, it must absorb all of that pent-up volatility at once,
making the first 30 minutes extremely unstable.
Professional Rule
Avoid deploying 0DTE strategies during the first 30 minutes on economic data days.
Price discovery is incomplete, spreads are wide, and gamma is unmanageable.
C. Build the Daily Playbook
Before the open:
- Define today’s expected move
- Identify key levels (ONH/ONL, VWAP, POC, prior high/low)
- Select the strategies allowed today (iron condors, flies, credit spreads, hedges)
- Set daily max loss (typically 1–2% of account)
- Set maximum gamma exposure
- Write down rules for adjustments and exits
The day must be planned before you begin trading it.
D. Pre-Market Position Sizing
Sizing is set based on:
- Volatility regime
- Expected move
- Market trend
- Account exposure
- Fractional Kelly principles
- Maximum gamma allowed
Professionals do not size positions impulsively during the session.
2. Market Open Discipline (9:30–10:00 AM ET)
The open is one of the most dangerous liquidity windows.
Professional rules:
- No large trades before spreads normalize
- Avoid taking positions in the first 3–5 minutes
- Scale in gradually as price discovery completes
- Do not trust early directional spikes
- Avoid all-in exposure before 10:00 AM
This window is dominated by ETF arbitrage, dealer hedging, and overnight order imbalances. The primary goal is
to observe, not to predict.
3. Primary Trading Window (10:00 AM–12:00 PM ET)
This is the preferred time to build 0DTE structures.
A. Build the Base Structure
Professionals deploy structures such as:
- Iron condors
- Iron butterflies
- Broken-wing structures
- Delta-neutral configurations
- Hedged premium strategies
Execution priorities:
- Maintain neutral to low delta
- Keep gamma controlled
- Avoid short strikes near acceleration zones
- Begin taking profit around 40–60% when available
B. Monitoring Cadence
At 10:00 → 11:00 → 12:00, update:
- Portfolio delta
- ATM gamma
- Implied volatility trend
- Distance to short strikes
- Realized vs expected move
- ES/SPX or NQ/QQQ divergences
This builds a historical log essential for long-term improvement and helps refine the playbook over time.
4. Midday Management (12:00–2:30 PM ET)
The market becomes quieter, but not necessarily safer.
A. Adjustment Triggers (Rule-Based Only)
Adjust only if:
- Price breaches the expected move
- A short strike enters the 0.30–0.50 delta zone
- Volatility spikes sharply
- Loss reaches 1.5–2× planned risk on one side
- A strong momentum shift occurs (VWAP break, volume surge, major trendline break)
B. Adjustment Tools
- Roll the threatened side up or down
- Narrow or widen wings to reshape risk
- Add debit spreads as hedges
- Re-center an iron butterfly
- Flatten delta via micro hedges, if used
No emotional adjustments. No guessing. Only rule-based changes.
5. High-Risk Event Day: FOMC (2:00–3:00 PM ET)
This is one of the single most dangerous hours for all 0DTE strategies.
A. 2:00 PM Rate Decision
At 2:00 PM, the Fed releases:
- Rate change
- Statement language
- Economic projections (on select meetings)
- Policy guidance
This often causes:
- Spikes of 20–40 SPX points in seconds
- Massive dealer hedging and rebalancing
- Temporary collapse in liquidity
- Widened options spreads
- Multi-directional whipsaws
B. 2:30 PM FOMC Press Conference
From 2:30–3:00 PM, the Fed Chair speaks and answers questions. The market often reacts
sentence by sentence:
- Algorithms respond to keywords and tone
- Traders flip positioning repeatedly
- Up–down–up–down whipsaws are common
- Implied volatility can spike and crash multiple times
Gamma risk is extreme. Spreads can become unpredictable. Normal risk control often fails in this window.
C. Professional Recommendation on FOMC Days
Among professional traders, a simple guideline is widely respected:
Avoid trading 0DTE entirely on FOMC days.
If trading is absolutely necessary, professionals will:
- Use 1DTE or 2DTE instead of 0DTE
- Use extremely small position sizing
- Avoid all exposure between roughly 1:45–3:05 PM
- Only consider trading again after the press conference ends and liquidity improves
Skipping FOMC day is not a sign of weakness; it is a sign of risk management maturity.
No trader has ever blown up by not trading an FOMC event.
6. Late-Afternoon Exposure Control (2:30–3:50 PM ET)
As gamma accelerates into the close, the objective is to reduce risk, not to chase returns.
- Gradually reduce position size
- Neutralize or reduce delta
- Close or trim losing trades
- Take partial profits where targets are reached
- Avoid large new positions as the close approaches
By 3:50 PM, most positions should be exiting, not adjusting.
7. Institutional “Fill at Close” Workflow (3:50–4:00 PM ET)
The most unstable 10 minutes of the day.
The market can move more in these final minutes than it did in the previous several hours due to:
- Massive MOC/LOC order imbalances
- Dealer hedging flows
- ETF and index rebalancing
- Sharp spread widening
- Volatility micro-spikes
- Dislocations between futures and the cash index
A. Use of MOC and LOC Orders
- LOC (Limit-On-Close) for price control
- MOC (Market-On-Close) for guaranteed exit
A common institutional approach:
- Submit LOC orders around 3:50–3:55 PM with realistic limits.
- Convert any unfilled LOC orders to MOC near 3:58–3:59 PM to ensure exit.
This hybrid approach seeks better pricing while making sure no unwanted exposure survives into the close.
8. Post-Close Risk Window: Long SPY/QQQ Options (4:00–5:30 PM ET)
Critical mandatory review for traders holding long near-the-money options.
Even after the bell, SPY and QQQ trade until 8:00 PM ET, and their component stocks also trade
after-hours. This creates a unique risk:
An option that is OTM at the 4:00 PM close can become ITM after-hours due to earnings releases or other
market-moving events.
Example:
- SPY closes at $499.90 at 4:00 PM.
- You hold a 500 call (OTM by $0.10 at the close).
- Nvidia releases earnings at 4:05 PM; index futures spike.
- SPY after-hours trades up to $503.
Your option is now $3 ITM, but it will not auto-exercise unless you or your
brokerage firm submit an exercise request.
A. When to Watch Out
- Mega-cap earnings (AAPL, MSFT, GOOGL, META, AMZN, NVDA)
- Index or ETF rebalancing
- Major after-hours news and guidance
- Significant futures spikes in ES/NQ
B. Professional Procedure
- Identify any long SPY/QQQ call or put that finished the regular session within roughly ±$1.00 of its strike.
- Monitor after-hours price action in the ETF and related futures. Focus on whether the option gains meaningful intrinsic value.
- Decide whether exercising the option is beneficial given your risk tolerance and desired overnight exposure.
- If you want the option exercised, notify your brokerage firm before their exercise cutoff
(often around 5:30–5:45 PM ET, but broker-specific).
Failing to act can result in missed profits or unintended overnight stock positions. Professionals treat this
post-close window as a mandatory checklist item.
9. After-Market Review (4:05–5:30 PM ET)
After positions and exercise decisions are finalized:
- Review best and worst decisions of the day
- Analyze execution quality and slippage
- Note how implied volatility behaved vs expectations
- Evaluate delta and gamma exposure during key moments
- Record any rule violations or emotional decisions
This daily review turns trading results into data that can systematically improve your process.
10. Weekly Review (Every Friday)
At the end of each week, professionals step back and evaluate:
- Win rate vs expected win rate
- Profit factor
- Drawdowns and their causes
- Performance by volatility regime (low, normal, high)
- Which structures performed best or worst
- Adherence to daily max loss and event-day restrictions
- Areas where the playbook needs refinement
This transforms a collection of individual trades into a coherent, continuously improving trading system.
Summary of Professional Principles
- Trade small and within clearly defined risk limits.
- Deploy 0DTE structures after the open, not during the most chaotic first minutes.
- Avoid deploying 0DTE size on major 8:30 AM data days during the first 30 minutes.
- Avoid trading 0DTE entirely on FOMC days.
- Use MOC/LOC logic to manage exits during the final 10 minutes.
- Never carry unintended gamma risk into the close.
- Respect after-hours risk on near-the-money SPY/QQQ options and manage exercise decisions proactively.
- Maintain a strict daily and weekly review process to refine the playbook.
By following a structured routine like this, 0DTE stops being a series of guesses and becomes a systematic,
repeatable, professional-grade approach to extracting option premium while controlling risk.