Comparative Analysis: 0DTE vs. Weekly vs. Monthly Options—Which Is Right for You?

Options trading is becoming increasingly popular in global financial markets, especially as the US equity options market provides a wide variety of expiration dates. These include 0DTE options (Zero Days to Expiration), which expire on the same day; weekly options, which expire each week; and monthly options, which expire once a month. Each type of product presents different risk-reward profiles for various market participants.But when comparing 0DTE, weekly, and monthly options, how these strategies differ in various market conditions. This article will conduct an in-depth analysis of the core differences among the three, their risk-return characteristics, and the types of investors they are suitable for, helping you make informed investment decisions.

What Are 0DTE Options

0DTE options are "zero days to expiration" contracts—that is, they expire on the very same day they are traded. The most distinctive feature of these options is their extremely short time frame: investors typically make decisions and complete trades within a single trading day. Unlike traditional options, the time value (the portion of the option’s price that exceeds its intrinsic value) of 0DTE options decays to zero rapidly within the day.

The mechanics of 0DTE options are essentially the same as other options; investors can buy or sell call or put options. Because the expiration time is so short, 0DTE options are highly sensitive to changes in the underlying asset’s price, especially for at-the-money (ATM) contracts, which exhibit very high gamma (a measure of how quickly delta changes).

Tip: 0DTE options are not suited to all investors. Due to the extremely short expiration, these products require fast responses and the tolerance for significant volatility.

For Hong Kong investors interested in options trading, Longbridge investment products offer US equity options trading services, enabling investment in US 0DTE options.

What Are Weekly Options

Weekly options are contracts that expire every week, typically on Fridays, although some markets (such as S&P 500 index options) now offer expirations for every trading day. Weekly options were introduced in 2005, when the Chicago Board Options Exchange first launched them on the S&P 500, and they have since expanded to a wider range of underlying assets.

Compared to 0DTE options, weekly options provide a slightly longer time frame, allowing investors more time to observe market movements and adjust their strategies. Their time value decays more slowly than 0DTEs, but faster than monthly options—especially in the last few days before expiration, when time value loss accelerates.

Weekly options are frequently utilized by traders seeking to capture short-term market volatility, such as around important economic data releases, company earnings periods, or when the market shows a short-term trend. Because they last longer than 0DTEs, weekly options generally have slightly higher premiums but offer different levels of strategic flexibility.

What Are Monthly Options

Monthly options are the oldest type in the market, typically expiring on the third Friday of each month (in the US market). Their longer expiration gives investors more time to watch the market, adjust positions, and execute more complex strategies.

With their longer time frame, monthly options’ time value decays more slowly. Throughout most of the life of the contract, decay is relatively steady, only accelerating significantly during the last two weeks before expiry. This makes monthly options commonly associated with medium to long term strategies, such as hedging, income collection, or directional trades based on fundamentals.

Monthly options are usually more liquid than weekly or 0DTE options (on the same underlying), with narrower bid-ask spreads that reduce transaction costs. They also provide a wider selection of strike prices, allowing investors to fine-tune their risk-return profile.

For those new to options trading, the longer time frame of monthly contracts reduces the risk of rushed decisions due to time pressure and offers more space for learning and adjustment.

Core Differences Among the Three Types of Options

To understand the differences among 0DTE, weekly, and monthly options, we need to compare them across several aspects, including time frame, speed of time value decay, price sensitivity, liquidity, capital requirements, and risk level.

Expiration and Trading Window

0DTE options expire on the trading day itself, giving investors just a few hours for trading. Weekly options generally last for a week, while monthly options provide a three-to-four-week window. These expiration differences directly affect your decision-making and strategy selection.

Speed of Time Value Decay

Theta decay (time value erosion) is a key concept in options trading. 0DTE options’ time value decays to zero rapidly within the day—the fastest of all. Weekly options lose value at a medium pace, with decay accelerating in the final 2-3 days before expiry. Monthly options experience the slowest decay, relatively steady early on, and picking up speed only near the end.

For option sellers, time decay is a key source of profit. Sellers of 0DTE options can capture time value within an extremely short period but must also withstand sudden swings in the underlying.

Price Sensitivity and Gamma

Gamma measures how quickly delta (the sensitivity to the underlying price) changes. 0DTE options have the highest gamma, particularly on ATM contracts, so even small moves in the underlying lead to large swings in option value. Weekly options are next, with monthly options having the lowest gamma.

High gamma results in higher price sensitivity for experienced traders using quick, in-and-out strategies—but it also comes with higher risk.

Liquidity and Transaction Costs

0DTE options for major underlyings are extremely liquid with tight bid-ask spreads. However, on less liquid assets, 0DTEs may suffer from wider spreads.

Monthly options tend to be the most liquid across underlyings, as they have the longest history and heaviest participation. Weekly options fall between the two.

Capital Requirements and Leverage

0DTE options generally have the lowest premiums, as they lack time value. This means lower initial capital is required and leverage is higher. By contrast, monthly options have higher premiums and lower leverage, but provide more time for your investment thesis to play out.

For investors with limited funds, 0DTE options allow entry to the market at a low cost, while monthly options can help reduce leverage risk.

Pros and Cons of 0DTE Options

Advantages

A significant characteristic of 0DTE options is is the potential to capture short-term price swings. If you can predict a move in the underlying during the day, you can potentially earn substantial returns in just a few hours. Moreover, their lower premiums lower the barrier to entry.
For sellers, 0DTEs offer the possibility to collect time value quickly, thanks to rapid decay. Many 0DTE traders cap their risk upfront—most commonly through selling vertical spreads to collect premium.
0DTEs also eliminate overnight risk. At the end of the trading day, you’ll know your outcome, without the uncertainty of after-hours moves.

Disadvantages

The main downside of 0DTE options is their extremely high price risk. The short window means even a tiny swing in the underlying could wipe out the option’s value entirely—hence some liken them to “lottery tickets.”

Additionally, 0DTEs demand fast decision-making and strong market insight. You must rapidly interpret market movements and act quickly, requiring experience and solid technical skills.

High volatility in 0DTEs also increases the risk of emotional trading. In fast markets, greed and fear can drive irrational decisions, raising the risk of losses.

Pros and Cons of Weekly Options

Advantages

Weekly options offer a longer time frame than 0DTEs, giving more space to observe markets and adjust, while still capturing short-term moves—without the extreme risk of 0DTEs.

They are frequently utilized for trading around events: US Fed meetings, major economic reports (like non-farm payrolls), or earnings releases. You can establish positions before such events and then close or adjust after seeing the market’s reaction.

Time decay on weekly options is slower than with 0DTEs, providing more opportunity to recover from an incorrect call. Even if your initial trade was off, you have time to adjust before expiry.

Disadvantages

Weekly options require higher premiums than 0DTEs, raising the upfront capital needed, which may limit your trade size.

They remain short-term products, so their time value decays faster than monthly options, especially in the final days, disadvantaging buyers.

They can also be less liquid than monthly options on certain underlyings, widening bid-ask spreads and transaction costs.

Pros and Cons of Monthly Options

Advantages

Monthly options give you the longest available time frame for options trading, letting you make trades based on fundamentals, technicals, or macroeconomic trends. The extended duration also grants you time to run more complex strategies—such as calendar or diagonal spreads.

The slow rate of time decay, especially in the early phase, gives you ample space to adjust. This makes monthly options commonly utilized for hedging, like protecting stock portfolios against short-term volatility.

Monthly options are typically the most liquid, with the narrowest spreads and lowest transaction costs. More strike prices are available, letting you build more precise risk-return profiles.

Disadvantages

Monthly options command the highest premiums due to their higher time value, which translates to higher entry costs and lower leverage. If you’re seeking large returns with a small bankroll, monthly options may have different cost structures.

Holding monthly options exposes you to overnight and weekend risk. While you hold the contract, unexpected events—such as geopolitical turmoil, sudden company news, or outlier economic data—can hit your underlying.

Also, price changes for monthly options happen more gradually (lower delta and gamma), which may not appeal to short-term traders.

How to Choose the Right Option Strategy for You

The choice among 0DTE, weekly, and monthly options depends on your trading experience, risk tolerance, time commitment, capital size, and investment objectives.

Based on Trading Experience

Longer-dated monthly options offer more time to adjust, reducing the chance of mistakes under time pressure. Weekly and especially 0DTE options generally require more experience and knowledge.

Based on Risk Tolerance

Risk tolerance is key. 0DTE options swing the most, and are often associated with ultra-short-term, high-risk/high-reward trades. Weekly options carry moderate risk, while monthly options involve the least. Monthly options can be for hedging or stable income, not just speculation.

Based on Time Commitment

0DTE options require close monitoring—you must be ready to act or adjust positions at any time. Weekly options require frequent, but not constant, market checks. When volatility is low, you can often check positions in the morning and evening or during breaks.

Monthly options require minimal daily attention. Thanks to the longer window, you can review positions daily or every other day, without being glued to the screen.

Based on Investment Objectives

0DTE options focus on aggressive, short-term gains. Weekly options also target short-term volatility but with less risk. If you want to hedge, seek stable returns, or invest on the basis of medium-term fundamentals, monthly options are frequently considered.

You can also combine types—for instance, long-term hedging with monthly options, while using 0DTEs or weeklies to capture short-term opportunities.

Practical Case Studies

Case 1: Intraday Strategy with 0DTE Options

Suppose an investor expects an index to move sharply within the day, due to an economic data release. The investor buys an ATM 0DTE call before the data. If the index rises as expected, the call’s value surges on delta and gamma effects, allowing a quick, profitable exit.

But if the market moves against the expectation, the option’s value could quickly drop to zero. Such strategies require strict stop-loss rules and only a small portion of capital.

Case 2: Event-Driven Strategy with Weekly Options

Suppose a well-known tech company is about to announce quarterly results. An investor expecting a positive surprise buys a weekly call before the announcement. With about a week to expiry, the investor can watch the market reaction and exit at a selected time.

If earnings beat expectations and the stock price rises, the option appreciates; if not, there’s still time to adjust, like selling a higher-strike call to form a vertical spread and cut losses.

Case 3: Hedging with Monthly Options

Suppose an investor holds a large position in a tech stock but fears a short-term downturn. The investor buys a monthly put as protection; if the stock drops, the put gains value, offsetting some of the stock losses.

Because the monthly option lasts longer, there’s no need to constantly adjust the hedge, reducing trading and management costs. This strategy suits periods of heightened market uncertainty.

These examples are for illustration only and do not constitute investment advice.

How Hong Kong Investors Can Participate in Options Trading

For Hong Kong investors, the US options market offers abundant opportunities. Many Hong Kong brokers offer US options trading, letting you participate in global options markets.

When choosing a platform, consider the following: trading fees (including commissions and platform charges), product coverage (support for 0DTE, weekly, and monthly options), trading tools (option analysis and risk management functions), customer service (Chinese language support and coverage during trading hours), and educational resources (whether options trading education and analysis are provided).

The Importance of Risk Management

Whether you choose 0DTE, weekly, or monthly options, risk management is essential for success. Options offer leverage, which amplifies both potential returns and risks, so a robust risk management system is crucial.

Set Risk Limits

You should define your maximum tolerable loss before entering a trade. Many 0DTE traders set their risk cap upfront, often by using vertical spreads to limit potential loss.

Diversify Positions

Don’t put all your capital in a single option or on one underlying. Diversification reduces the impact of a single failed trade on your portfolio.

Avoid Excessive Leverage

While options provide leverage, too much of it greatly increases risk. Make sure your position size matches your capital and risk appetite.

Keep Learning and Reviewing

Options trading requires continuous study. Regularly review your trades, analyze what worked and what didn’t, and continually refine your strategy.

Frequently Asked Questions

Are 0DTE Options Riskier Than Weekly and Monthly Options?

Yes, 0DTE options are generally riskier than weekly or monthly options, because their ultra-short expiry means even a small move in the underlying can wipe out the option’s value. The time value in 0DTEs evaporates within the trading day—very unfavorable to buyers. The high gamma also means extreme price sensitivity, requiring fast decisions and strict risk management. By contrast, weekly and monthly options give you more time to adjust, making risk more manageable.

What Type of Options Should Beginners Start With?

Monthly options are often considered as a starting point for beginners. Their longer expiry and slower time decay give you more time to learn and adjust. Through monthly options, you’ll get to know essentials like intrinsic value, time value, Delta, Theta, and how to build basic strategies. Once you have enough experience and confidence, you can try weekly or 0DTE options. Beginners should also start small and get familiar with options through paper trading.

How Do I Determine Which Options Align with My Investment Style?

Choosing the right type of option depends on trading experience, risk tolerance, time commitment, investment goals, and capital. Structure your strategy according to both your own circumstances and the specific features of each option type.

How Do Weekly and 0DTE Options Differ in Liquidity?

Liquidity differences between weekly and 0DTE options mainly depend on the underlying asset. For major indexes like the S&P 500, 0DTEs are extremely liquid—now accounting for more than 50% of total options volume, with very tight spreads. In contrast, less liquid single stocks or smaller ETFs may see wider spreads and lower volumes in 0DTEs. Weekly options generally maintain stable liquidity across most underlyings, with reasonable volume and tight spreads. Always check the option chain for actual spreads and open interest before trading.

Conclusion

0DTE, weekly, and monthly options each have their own characteristics and are presents different characteristics for different investors. Selecting the right strategy depends on trading experience, risk tolerance, time commitment, capital size, and investment objectives. You can also diversify by combining different option types, capturing multiple opportunities while keeping risk in check.

Whatever you choose, risk management remains the key to success. Set clear risk limits, diversify your holdings, avoid excessive leverage, and consistently learn from your trading records. Visit Longbridge Academy or download the Longbridge App for more investment education.