Index Call Option Skyrocketed by 22,566% on Tariff Pause

Options Newsman joined discussion · Apr 10 17:36

by Jinta HONG, CFA

Yesterday could be one of the most impressive single day for index options trading, as 0DTE(zero day to expiration) call options on the $Nasdaq Composite Index (.IXIC.US)$ ETF ended up with soaring over 22,566%, sparked by Trump's surprise announcement of a 90-day tariff pause. This news sent the stock market soaring, with the $S&P 500 Index (.SPX.US)$ popping 9.5% and $Nasdaq Composite Index (.IXIC.US)$ jumping 12.16% recording its largest single-day gain since 2008. Big Tech outshone the market led by 22% gain for $Tesla (TSLA.US)$ and 19% for $NVIDIA (NVDA.US)$.

from Barchartt

Trump Turned Traders into Millionaires in Just 4 Hours

Before Trump's announcement, we can see the net call premium of the S&P500 index option keep going up steadily. And there was a surge in buying of 0DTE call options on the S&P 500 ETF These options, which would have been nearly worthless without positive news, surged over 2000% in a just 10 minutes after the tariff news broke.

from Unusual Whale

Looking into Unusual Activity, the most dramatic example was a trader who invested about $260,000 in 0DTE S&P500 ETF call options 15mins before the news was released, which turned into $5 million almost by the time the market closed just 4 hours later.

from moomoo

However, others see potential red flags for insider trading. The precision timing to take on extreme risk with 0DTE options, especially given the high implied volatility that morning, suggest these traders had a high degree of confidence in an market move. Trump himself posted on social media earlier in the day that THIS IS A GREAT TIME TO BUY!!! DJT. This public statement, combined with the subsequent market-moving news, has led some to question whether insider information was improperly shared.

from Truths

Volatility is New Normal and 0DTE Options are Gaining Popularity

The market has become increasingly volatile since the Trump administration, leading to more frequent and sudden market swings. In just April alone, we witnessed 3 significant outliers in the performance of the S&P500 SPX and the VIX. This increasing volatility has made traditional longer-term options strategies less effective for capturing short-term movements.

from Bloomberg

In this environment, 0DTE options have gained significant popularity. As daily uncertainty and volatility in the market increases, these short-term options allow traders to take advantage of intraday price movements without having to commit to longer-term positions. In 24Q4, 0DTE options account for 51% of the S&P 500 options volume and this number is expected to rise even higher in 2025.

Index Call Option Skyrocketed by 22,566% on Tariff Pause

The advantage of 0DTE options in this volatile environment is their ability to provide targeted exposure to specific events or market catalysts, such as economic data releases, policy statements or corporate earnings. Their lower upfront costs and high gamma exposure allow traders to potentially achieve outsized returns on short-term market moves, making them an attractive tool for both speculative trading and precise hedging strategies.

Learn More about 0DTE options:

A Closer Look at 0DTE Options: Short-Term Trading Explained

How to Trade 0DTE Options on moomoo

Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options (https://j.moomoo.com/017y9J) before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request.

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