0DTE Options Hedging for Stock and ETF Portfolios

A Beginner Overview of Option Pricing, Stress Testing, and Position Sizing

0DTE options hedging for stock and ETF portfolios – option pricing, stress testing, and position sizing – explained in plain English for beginners.

This beginner overview examines how same-day expiration (0DTE) options function as contracts, how their prices are commonly described, and why market conditions can change what option quotes look like across calm and fast sessions. Rather than focusing on predictions, the book emphasizes interpretation: what intrinsic value and time-and-uncertainty value represent, how implied volatility is reflected in option prices, and how delta, gamma, theta, and vega help describe sensitivity as the day progresses.

Readers may learn about:

• Core mechanics of expiration day: expiration, exercise, assignment, and settlement

• Intrinsic vs time-and-uncertainty value and how option quotes can change intraday

• Implied volatility as priced uncertainty and how regimes and event days affect pricing

• Stocks vs ETFs as different exposure shapes, including correlation shifts in stress

• Liquidity and microstructure basics, including bid-ask ranges and quote stability

• Loss paths and scenario thinking for describing drawdowns beyond a single number

• Stress testing as scenario description and position sizing as a boundary under uncertainty

Written in a calm, educational tone, this book is designed to help readers build a clearer vocabulary for evaluating hedging conversations and understanding what same-day options are doing in different market environments, without relying on hype, promises, or one-size-fits-all claims.