(Bloomberg) — Day traders are paying a price for their newfound love affair with one of the hottest trades in the equity market.
Rushing to join the trading frenzy in options with ultra-short lifespans, known as 0DTE for zero-days to expiration, small-time investors find themselves struggling to make it work. A fresh study from researchers at the University of Muenster in Germany shows the crowd may have lost $358,000 a day since May 2022, when it became possible to trade expiring contracts every day.
The record is alarming, but probably not a huge surprise. By one estimate, amateur investors took a billion-dollar bath dabbling in stock options during the pandemic boom. The new game of 0DTE is more challenging in many ways, among them the tight timeframe in which wagers need to work out.
finance.yahoo.com/news/day-traders-lose-358-000-134503874.html