Why Most 0DTE Traders Lose — And What Separates the Rest
Emotion, poor contract selection, and ignoring spread quality account for the majority of 0DTE losses. Structure changes the equation.
The statistics are well-documented: the vast majority of options buyers lose money over time. In the 0DTE space, the failure rate is even higher because the margin for error is razor-thin.
Here are the primary reasons traders fail at 0DTE:
1. Emotion-Driven Entry
A trader sees SPY move $2 in 15 minutes and chases a call. By the time they enter, the move has already priced in. They overpay, the position stalls, and theta eats their premium. This pattern repeats daily across thousands of accounts.
2. Ignoring Spread Quality
Most retail traders don't check bid-ask spreads before entering. They see a contract price, click buy, and immediately start the trade $0.10–$0.30 underwater. On a $1.00 contract, that's 10–30% in execution cost alone.
3. No Liquidity Awareness
Low-volume strikes look cheap for a reason. When you need to exit quickly — and in 0DTE, you always need to exit quickly — there may not be a buyer at a reasonable price. You either take a massive loss or watch the contract expire worthless.
4. Holding Through Theta Windows
Experienced traders know that the last 90 minutes of trading is when theta decay accelerates exponentially. Holding a moderately profitable position into this window without understanding the decay curve leads to watching gains evaporate.
5. No Pre-Trade Scoring
Most traders pick strikes based on price alone. They don't evaluate liquidity depth, spread percentage, implied volatility context, or moneyness probability. Each of these factors contributes to the probability of a favorable outcome.
What Changes the Equation
The traders who survive 0DTE long-term share common traits: they filter before they trade, they score contracts on multiple dimensions, and they don't chase.
They treat each trading day as a probability exercise — not a gambling session. Structure doesn't guarantee profits. Nothing does. But it eliminates the unforced errors that account for most losses.
Risk Disclosure: Options trading involves substantial risk of loss. This content is educational and does not constitute financial advice.