When some investors are betting that AI earnings, geopolitics, and interest rates will push stocks to new highs or drag them into a sharp selloff, zero-day options traders are increasingly wagering that the S&P 500 Index will stay calm.
UBS Group derivatives strategist Kieran Diamond's analysis of same-day expiry options (0DTE) fund flows reveals a notable shift among tactical traders: buying call options and selling put options when the market falls, and doing the reverse when it rises.
They call this strategy "counter-trend Delta bias," and its net effect is equivalent to buying low and selling high, further suppressing volatility in the S&P 500 Index.
Garrett DeSimone of OptionMetrics said same-day expiry options have taken on an outsized role in the index's daily swings, with about 66% of total volume expiring within a single day.
This has put short-term positioning under intense scrutiny, as retail and institutional traders alike try to figure out how options flows are influencing the $66 trillion U.S. benchmark index.
Diamond said: "This counter-trend trading pattern appears to be a response to an extremely range-bound market. The scale of these options flows means it may begin to take on a self-fulfilling quality—options investors are helping to cap price moves in both directions."
UBS said the growth in 0DTE counter-trend trading flows is now so large that its net effect has surpassed the impact of options dealers re-hedging their positions.
The "effective gamma" generated by contrarian trading is higher than actual options dealer gamma.
Of course, if the market experiences sustained selling—beyond the kind of decline seen Thursday when AI-related stocks led losses and dragged the S&P 500 down 1.2%—this pattern could change.
Diamond said: "While counter-trend flows have been very consistent so far, nothing prevents this dynamic from reversing during periods of rising volatility. If 0DTE investors switch to chasing declines by buying put options, their flows could amplify the selloff and also put pressure on market makers to manage short gamma risk."
Although the impact on the S&P 500 Index is volatility suppression, in the technology sector for example, some short-term trading has produced the opposite effect.
This has given rise to successful intraday momentum strategies—where flows tend to amplify both upswings and downswings.
Premialab CEO Adrien Geliot said: "Dealer hedging behavior related to 0DTE options can reinforce intraday momentum or drive mean reversion, depending on the prevailing gamma environment at the time. During the April-to-June rally, semiconductor-focused intraday momentum strategies performed strongly; the current market focus on S&P 500 reversal signals highlights how these dynamics can differ dramatically across market conditions."
He added that since late March 2025, the number of live strategies in this sub-segment within Premialab's QIS database has grown by 50%.
Geliot said: "The key challenge is how to translate these signals into strategies that can consistently capture these effects, while also accounting for execution costs."
Overall, demand for insight into options positioning is growing, with more retail platforms entering the space and providing market information.
Each platform has its own methodology for mapping intraday options Greeks—Gamma, Vanna, and Charm, the metrics that reflect how traders and dealers may need to respond—with the aim of giving market speculators an edge.
The boom in 0DTE trading only makes positioning's role as an important technical driver of intraday price action more prominent.
Today, the Delta-adjusted notional value of S&P 500 options portfolios easily exceeds the average daily volume of E-mini futures—suggesting that the options "tail" is sometimes wagging the stock "dog."
S&P 500 options trading Delta is higher than futures trading.
Increased access to data and client demand for insight have pushed some institutional service providers to improve their estimates of dealer net positioning.
Early frameworks typically assumed all call options were sold by end clients and all put options were bought by clients, while newer models are more granular.
JPMorgan derivatives strategists recently wrote that they have abandoned the proxy method of estimating S&P 500 gamma positioning based on open interest, shifting instead to a more flow-based approach using data from Cboe Global Markets Inc.—data that allows for a detailed breakdown of whether each options trade was bought or sold by a client.
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