Market analysts have sounded the alarm as the craze for zero-day to expiration contracts, known as zero-day contracts or 0DTEs, brings new volatility to the wider equity market and impacts underlying assets
For trading desks hedging structured products, 0DTE options are not a game-changer, but one potential hedging instrument among others used by traders. “Their recent surge provides with an additional tool in the dynamic hedging toolbox, for the potential short-dated residual exposures, but our products typically entail longer maturities,” said Pierre Gimenes (below-right) , global co-head of structuring for global markets, at SGCIB. This, however, means that “structured produc