0DTE trading strategies: Practical approaches to more efficient backtesting

0DTE (zero-day-to-expiration) options have surged in popularity. They now represent roughly half of daily S&P 500 index options volume. This rapid growth offers exciting intraday trading opportunities. However, it also brings unprecedented volatility and risk management challenges. 

In this white paper we discuss the need for more efficient strategy testing and optimization in the 0DTE arena. We explore how institutional traders leverage high-frequency historical data, intraday market replay, and scenario analysis (including Monte Carlo simulations) to evaluate strategy performance under a multitude of intraday conditions. 

Read practical insights on how institutional traders are leveraging:

• High-frequency historical data to evaluate intraday backtesting
• Advanced techniques including intraday market replay to rigorously evaluate 0DTE strategies
• Scenario analysis and Monte Carlo simulation to evaluate performance under a wider range of conditions than observed in history

Discover how more efficient backtesting can sharpen your edge in ultra-short-term markets.