---
title: 'Why Trade 0-DTE with Options on E-mini Futures - Podcast Episode #93'
source: 'https://youtube.com/watch?v=UwjMhSn4Mkc'
video_id: 'UwjMhSn4Mkc'
date: 2026-07-17
duration_sec: 1279
channel: '0DTE'
---

# Why Trade 0-DTE with Options on E-mini Futures - Podcast Episode #93

> Source: [Why Trade 0-DTE with Options on E-mini Futures - Podcast Episode #93](https://youtube.com/watch?v=UwjMhSn4Mkc)

## Summary

This podcast episode explains why E-mini S&P 500 futures are superior to standard SPX options for trading zero days to expiration (0-DTE) strategies. The speaker contrasts the two instruments, highlighting futures' 23-hour trading, volume data, and exemption from pattern day trader rules, while arguing that SPX's lower commissions only benefit high-probability, low-profit strategies.

### Key Points

- **Why Most Traders Use SPX for 0-DTE** [00:07] — Most traders choose SPX options because they are cheaper in commissions, which is critical for high-probability strategies with slim profit margins.
- **What Is a Futures Contract?** [01:16] — A futures contract is an agreement between buyer and seller with an expiration date, but unlike options, it has no time premium. It was designed for hedgers to maintain price stability.
- **Hedgers vs. Speculators** [04:21] — Hedgers are involved in the cash market and use futures to protect against price changes. Speculators (retail traders) provide liquidity by betting on price direction without taking delivery.
- **E-mini Futures Expiration** [05:40] — E-mini S&P futures expire quarterly (March, June, September, December) and are cash-settled, not deliverable.
- **Options on Futures vs. SPX** [08:05] — Options on futures have time premium and are European-style (no early assignment). SPX options are cash-settled, so no assignment risk, but futures options assign a futures contract if ITM at expiration.
- **Key Advantage: 23-Hour Trading** [11:04] — E-mini futures trade 23 hours a day (6 PM to 5 PM next day with one-hour break), while SPX only trades market hours (9:30 AM to 4 PM ET).
- **Volume and Order Flow Analysis** [12:10] — Futures have real volume data, enabling volume and order flow analysis. SPX has no volume, limiting analysis to price action only.
- **No Pattern Day Trader Rule** [14:21] — Futures are exempt from the pattern day trader rule, allowing unlimited day trades even with accounts under $25,000. SPX traders are limited to three day trades in a rolling five-day window.
- **Asymmetric Trade Advantage** [17:38] — The speaker's 0-DTE strategy uses asymmetric trades with small risk and large profit potential (10-50x return on capital), making higher futures commissions negligible.

### Conclusion

E-mini futures offer superior flexibility, data, and regulatory advantages for 0-DTE trading compared to SPX options, especially for asymmetric strategies with high profit potential.

## Transcript

July 11th around uh 2:30 or so. And today we're going to talk about why the E- mini futures is the preferred way
the E- mini futures is the preferred way to trade the zero DTE. Now I know that most people will trade zero DTE with the S&P and there's a good reason why they they do that and uh that is because they
choose to trade a certain strategy where it is such a poor strategy has where it is such a poor strategy has such um from a risk-to-reward point of view they have such slim margins the amount of money that they can make that
they have to choose the cheapest possible options contract. its size or anything like that, but in terms of commissions. They don't care commissions because if they don't, then it will eat
into their potential profits. That's really the reason why they do it regardless of the fact that the S&P is an inferior an inferior um asset to with zero DTE.
So, that's why they do it. But why would you use the E- mini futures contract? The E- mini S&P 500 futures contract. First of all, what is a futures contract? A lot of people are kind of they have this
weird idea that it's something like an options contract because it has an expiration. That's about the only thing that it has Well, there are two things. One is that it is a contract between a buyer and a
seller. And the other is that it has an expiration in a period of effectivity. Right? So it is a contract just like any other contract that you can purchase or negotiate in the world or the United States or
from. But the big difference is that there is no time premium associated with a futures contract. A fuchious contract was designed for a very very specific purpose and that is to help um protect
price stability of buyers and sellers of various commodities. Now when you think of commodities they can be a wide range of things. It could be it could be lumber, it could be um a precious metal. It it could be hogs. It
could be grain. It could even be an index or an equity position. So all of these things are commodities. They even have, believe it or not, they have weather uh futures contracts. But the purpose of a commodity or a
futures contract is to help both the buyer and seller, the two different parties that are involved in the cash market of that particular commodity maintain price stability. So to give you an idea, well in at its
very essence, it is to keep the price that you have right now the same as the price when you want to get delivered the commodity. And that's the other thing that a futures contract does. You purchase a futures contract. Now, let me
let me be clear here. This this is probably a foreign concept to most people that have ever traded futures. That's because you guys out futures. That's because you guys out there are not the original were not the
original intent for futures contracts. They were originally meant for people who are in the cash market for that particular commodity so that they could transact back and forth and take delivery at specified prices at
specified dates and they would keep th those prices in check. So, if you were a buyer of a futures contract, you were somebody that was trying to protect somebody that was trying to protect against uh an overpric commodity. If you
were a seller or a producer of that commodity, you would sell futures contracts to protect against a market where the thing that you're trying to sell to a buyer happens to degrade in price. So, you are a a true hedger. That
is what a hedger actually is. they are somebody who is involved in the actual somebody who is involved in the actual cash market of the underlying commodity and it even works with things like um
equity positions too. So it's different but it's similar. You on the other hand are not a hedger. You are not involved in the cash market. You never take or will ever take delivery of gold or oil or anything else
that's on the other side of that contract. You have absolutely no intent. You are strictly a speculator. So what is your purpose then contracts? Well, you have a very very specific purpose. Without the
speculator, there probably wouldn't be enough liquidity for there to be a there's a limited number of buyers and sellers of these commodities. So, but they need a liquid market so that they can make it work. So they open it up to
speculators like you so that you can bet on the rise and fall of that future. So those are the two different types of people that are involved in a futures
contract. The hedggers that are involved in the cash market and the speculators, that's you, who only cares about whether the futures contract goes up or down.
the futures contract goes up or down. Now the uh the E- mini is a special type of futures contract. It doesn't have a deliverable per se. It is cash settled and it has a certain period of effectivity. These contracts are
generally they generally last for a quarter one quarter of a year and so they expire at various points throughout the year. So a the E- mini S&P futures
as well as all the other equity contracts e equity futures contracts contracts e equity futures contracts expire in March, June, September and December. Those are the expireies. Now there's nothing special about this.
However, there are some speculators that will look at these futures contracts and they will do special things with these different expiring contracts because you can have more than one of these contracts active
at any one time and this is particularly um true with various types of commodities especially in agriculture and energy and so forth. So like for instance oil they don't have quarterly expirations they have monthly
expirations and this is important uh to uh various speculators because they want to play and when they want to provide liquidity but they do it in such a way that they'll play an arbitrage or a what's called a calendar spread between
contracts and they will uh go long and go short either the front or the back month of the contract and then they make profit by the difference in the profit by the difference in the fluctuation between uh those two
differently dated different expiring contracts. might want to do this. And it's particularly true in um with like refineries or any other industry that has shorter term rollover in terms of
the underlying commodity and they use these spreads as their kind of margin that will then drive the business of the underlying commodity. So that again is very very different from what you do because you don't do that. You don't go
and play calendar spreads on futures. You don't do arbitrage between a uh a You don't do arbitrage between a uh a 10-year uh bond and a two-year note. You have no idea what that even means. All you care about is if it goes up or down.
So same thing here with the E- mini futures. The E- mini futures is a um a solid product, one of the most widely traded assets in the world, the one of
the most liquid markets in the world. And there happen to be options on these things as well. Now, the options, they do have a time premium associated with them. In fact, the options on a futures contract are really no different than
the options on any other type of underlying asset. Now there are different types of option contracts. There's generally two types. There's the American and European style. And those have to do with how uh
exercise how you exercise those things and whether or not there is any assignment. The equity options contracts including on the S&P and the E- mini futures are European style. So there is no
possibility of early assignment like you get with stock futures which are American style. So they are more conducive then for a speculator who is trading at the end of expiration of an options contract
because you don't have to worry about early expiration. Matter of fact, you don't have to worry about it at all because there is no uh expiration. Now I guess that is the other big
difference between the E- mini futures and the S&P. E- mini futures. If you have any leg of your options strategy that is in the money at expiration, you
will be assigned a futures contract. No getting around it. No matter what you will, if it's just one penny in the money, you are going to get assigned, which is it could be your plan to do
that. Uh it may not be your plan or you may just want to avoid it altogether. With the SPX, you can't get assigned because there is no actual SPX. It doesn't exist. It's a calculated index. There's no way to actually assign you an
There's no way to actually assign you an SPX because it's vaporware. It's like Bitcoin. So, it is cash settled. And for that reason, some people prefer to use the SPX because it's cash settled
for zero DTE strategies because they do not have the temerity to be able to not have the temerity to be able to actually or even just the discipline to to be able to handle it or just don't understand it and it's just easier for
them. So, they can sort of dismiss futures. They say, "Ah, futures, those money with those. and they don't really understand the value of it and so they understand the value of it and so they choose the um the other option which
actually is a worser option overall. Why is it a worseer option? The S&P is a worseer option than the E- mini futures primarily
for the fact that it is not traded 20 around the clock like the futures contract. The E- mini S&P futures is traded around the clock 23 hours a day. traded around the clock 23 hours a day. It opens at 6 p.m. one day, closes at
5:00 p.m. the next day, and there's an hour where it's off the markets, off the books. So, that presents incredible opportunity for the speculator to take different positions or get out of positions
anytime they want. With the S&P, you're limited to market hours from 9:30 a.m. Eastern time to 4:00 p.m. Eastern time. That's it.
If something happens outside of the market, you have to wait for the market to open and then you only have a 6 and a half hour time frame in order to execute your trade. With futures, you have no such limitation
around the clock in and out anytime you want. Another big difference between the want. Another big difference between the two,
is certainly a huge difference. I mean, even beyond, you know, when you're talking about um analytics or whatever, and I had mentioned that the S&P isn't a it's not actually traded. There's no volume. You can't besides the fact that
volume. You can't besides the fact that it's only open from 9:30 to 4. And the only type of analysis that you can do is between those hours and it has to be price oriented analysis. You cannot do volume oriented analysis because there
is no volume. With the futures, you have all of the data that you need, all of the hours, and the continuity of a 23-hour a day contract that also has actual volume. That's because it is a real thing. It is a real contract that
real thing. It is a real contract that is transacted between um speculators and also hedgers. So, that's another huge thing. As a matter of fact, when we if we do trade the S&P, we still need to use the E-
mini futures to do our analysis so that we can get an accurate read on where price uh might be going or where the volume is, where um where it's showing value and where it's not showing value. Otherwise, we would have no idea.
And certainly, most professional traders do not use price action as their guide to figure out where the value is in a particular asset. They use volume. they use orderflow. Can't do that with the S&P.
S&P. So, all of these reasons make for a very So, all of these reasons make for a very strong argument for the E- mini S&P futures and it's the reason why we trade it here at zero-d.com.
trading zerodte strategies. There could be an exception uh made if you were developing a final hour strategy where you're opening and closing it on those on the final few
minutes of the market and uh there might be some uh benefit there if you have a very large account. Now, there's another big benefit for the E- there's another big benefit for the E- mini futures that I didn't bring up, and
that is if you are a small player, a retail trader that has under $25,000, or even if you have a large account and you only have $25,000 of margin to play with, which is very possible. You could have all your money tied up in different
stocks or whatever and only have a certain amount of margin. you're trading the S&P and you day trade, which is what a zero DTE strategy
trade, which is what a zero DTE strategy um dictates to day trade, you only have three opportunities for trades in any 5day rolling window. Otherwise, you will get tagged as a pattern day trader and your broker will shut your account down.
Just shut it down for 90 days. No trading for you. None. Zippo. Nada. trading for you. None. Zippo. Nada. Because you are a criminal, a pattern
day trader. There is no such restriction with futures. You could trade the E- mini futures a thousand times in a day and never be deemed a pattern day trader
because it doesn't apply. Simply does not apply. not apply. So considering that most people that are trying a strategy like uh zero DTE or zero- DTE for the first time and they're
maybe not willing to put a huge money until they get used to that strategy or if you just have a smaller account. Unless you trade the EMI futures, you're you're out of luck.
And particularly and particularly now that the um CBOE and the CME have now uh increased the number of days that there are weekly options on the S&P. Friday, but now they've added Tuesday and Thursday. So now you have five
going to trade it with the S&P. You would have to jump through hoops in order to avoid being a pattern day trader or just sacrifice which days that trader or just sacrifice which days that you can and cannot trade.
With the E- mini futures, you can trade every day. No worries at all. None whatsoever. And when it came down to what I had mentioned earlier, the uh the thin margins and one reason why you might
choose the S&P because the commissions are are less on that and that is you know that is a consideration for a lot of people with smaller accounts only if you are trading the other way they trade zero DTE with high probability
zero DTE with high probability strategies with huge risk tiny bit of profit, they have to go after they have to use an underlying security that has very very little commission on it because they can't
afford it. That's because the amount of commission versus the um potential profit that they're going after is just way too big. way too big. But with the way we trade zero DTE doing
asymmetric trades that are relatively low probability compared to those. However, our risk is very very tiny if it if there's any risk at all and the
it if there's any risk at all and the profit potential is huge. profit versus our return, our capital use, our return on capital is 10 to 50
times greater than those people doing the other way of zero DTE. So therefore, the commissions even though they are higher are of little consequence to us because we're you we're literally using 20 times less money going after the same
amount of profit. So we can go after much larger profits with just a little bit more money, just a tiny little bit, but still onetenth or a tiny little bit, but still onetenth or 115th of what they're using. And now the
commission versus the profit they're going we're going after is tiny. Even though it's more expensive per contract, it's still tiny. it's still tiny. Again, that is why here at zero-d
we use futures. It is all around the better product. End It is all around the better product. End of story. And with zero-d as the underlying strategy, it is a great combination.
when applying for futures with TDM trade, the application asks your object objective and gives two options, speculating and hedging. Yeah, you're a speculator. You're not a hedger. [laughter]
not a hedger. Most people don't even understand what a hedger is. They have this idea that they're going to hedge their their um their positions when all they're really doing is reducing their profit potential. They're not hedging
their positions because they have no idea what that actually means. So yes, you are a speculator when you apply for for a futures account. Okay, that's it. That's all I've got to say. Now you know the rest of the story.
E- mini futures are the way to trade zerodte and zero-d zerodte and zero-d is the best darn strategy out there, bar none. really a professional strategy
and it's more than just a strategy or an alert service here. Here it is also well you come here really to learn how to become a professional trader.
Not a speculator, not a retail speculator, but a professional trader. That's what zero. And it doesn't matter if you're new to it or not, or if you're, you know, a seasoned veteran, you're going to learn the professional
you're going to learn the professional way to trade. How about we see some examples? What kind of examples could you want? I'll do that for next time. I will show uh examples of um I I'm not sure exactly
what you're looking for, but we'll um we'll find out. And uh next time I talk about futures, we'll put bring up some examples. All righty. Thank you very much. Peace to you all. See you next time. Have a
to you all. See you next time. Have a good one.