The Hong Kong Stock Exchange is seeking to launch same-day expiring options contracts as early as the first half of 2026. According to sources familiar with the matter, the exchange is planning to introduce Hang Seng Index "zero-day options" contracts. The Hong Kong Stock Exchange has already consulted market participants on this initiative, and the feedback has been positive.

Zero-day-to-expiration options (0DTEs) are options contracts that expire and become void on the same day they are traded, meaning they have less than 24 hours until expiration. At this stage, traders have very limited time to buy or sell the underlying asset, and the trading process must be extremely fast.

How Do Zero-Day Options Work?

Options are financial derivatives that give the holder the right—but not the obligation—to buy or sell a certain quantity of an underlying asset at a specified price (the strike price) on or before a specified date (the expiration date). At expiration, if the option is in the money (ITM), it is typically exercised automatically. If it is out of the money (OTM), it expires worthless, and the buyer loses the entire premium paid.

Zero-day options refer to options that expire today. These options function the same way as standard options, but because they have virtually no time remaining, their price is influenced almost entirely by the intraday price movements of the underlying asset, with minimal time value. This makes 0DTE options extremely sensitive to price fluctuations—prices can double within minutes or drop to zero in an instant.

Traders use 0DTE options primarily for ultra-short-term speculation or to make directional bets on key market events. Due to their extremely short lifespan and rapid price movement, they offer the potential for substantial gains in a short period—but also come with a very high risk of loss.

Pricing of Zero-Day Options

The value of zero-day options is driven almost entirely by their intrinsic value:

For call options:

Intrinsic value = Current price of the underlying asset – Strike price

For put options:

Intrinsic value = Strike price – Current price of the underlying asset

(only when the strike price is higher than the current price; otherwise, the intrinsic value is zero)

The time value approaches zero:

Since the option expires today, there is no remaining time for the position to benefit from future price movements. As a result, any time premium typically found in options pricing disappears.

Key Reasons for Preferring 0DTE Strategies

Although 0DTE options carry significant risks, they also offer opportunities for rapid profits.

No Overnight Risk:

0DTE options are traded and settled within the same day, eliminating the need to hold positions overnight. This helps traders avoid the uncertainty and risk caused by sharp market movements after hours or at the next day’s open.

Lower Premium Costs:

Since these options are about to expire, their time value is minimal. As a result, the option premium (i.e., the option price) is typically lower than that of longer-dated options, allowing traders to participate in market moves at a relatively low cost.

Tighter Bid-Ask Spreads:

When liquidity is high, 0DTE options often feature very narrow bid-ask spreads. This enables traders to enter and exit positions closer to the market price, reducing transaction costs and improving execution efficiency.