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Luke Kawa2/12/25

Is Robinhood feeding the frenzy of zero days to expiry options trading?

One thing I’ll be looking for when Robinhood Markets reports earnings after the close won’t show up in any of its fourth-quarter numbers. And that’s any color from management on early uptake of trading in index options, which launched on January 21, on the platform beloved by retail traders.

In particular, I’m interested in the extent to which the availability of these derivatives deepens the boom in trading of S&P 500 options with zero days to expiry. Yes, that’s same-day options punts, rapid theta decay be damned.

(Disclosure: Sherwood Media is an editorially independent subsidiary of Robinhood Markets Inc. I own HOOD stock as part of my compensation.)

S&P 500 options with zero days to expiry (0dte) have seen rapid growth, from an average of 932,744 traded daily in 2022 to upward of 1.5 million in 2024.

Now, correlation is certainly not necessarily causation here (and it’s still very early days), but there’s been an acceleration in the growth of S&P 500 0dte trading since the introduction of index options on the platform. The five-day average of 0dte S&P options traded is up about 0.5% from the first five sessions of the year through Monday. Post launch, volumes are up 2.4% compared to their prior 2025 average.

This includes (and may be distorted by) the record activity in these contracts in the final trading day of January, per Cboe.

On Tuesday, 0dte expiries were nearly 60% of S&P 500 option volumes traded, per Bloomberg data, up from an average of about 51% in the fourth quarter of 2024.

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While November is historically the best month for US stocks, the first week of the month in 2025 wasn’t great.

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The insanity over the Starbucks “Bearista” cups tells you everything you need to know about the US economy and markets

Upper-income consumers and megacap tech companies are both a) doing well and b) supply constrained.

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Retail traders are “skipping the dip” this time

Here’s one noteworthy feature of the recent market downturn that has the S&P 500 poised for its worst week since reciprocal tariffs were announced in early April: retail traders seemingly aren’t eager to buy the weakness in single stocks the way they used to be.

JPMorgan strategist Arun Jain has flagged that retail traders instead appear to be “skipping the dip.”

“In contrast to the behavior observed during the post-Liberation Day selloff, retail investors did not seize the opportunity to buy-the-dip on Tuesday, with a few exceptions such as META,” he wrote of the day where the benchmark US stock index fell 1.2%. “In fact, they scaled back their ETF purchases and turned net sellers in single stocks.”

Then on Thursday, when the S&P 500 fell 1.1%, Jain projected that retail traders sold $261 million in single stocks. Through noon ET on Friday, his daily outflow estimate stands at $851 million.

With that intel, it’s little wonder why the carnage this week has been particularly intense in more speculative single stocks that had been favored by the retail community, including IREN, IonQ, Rigetti, Cipher Mining, Bloom Energy, and Oklo.

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Archer Aviation plunges on $650 million share sale following its third-quarter results

Air taxi maker Archer Aviation is deep in the red on Friday morning after reporting its third-quarter results after the bell Thursday. The stock is down more than 12%.

Investors don’t appear to be thrilled about the company’s $650 million direct stock offering, announced alongside its results.

The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

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The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

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