The same option can cost a different amount in the morning and in the afternoon, even if the index has not moved at all. The reason is not direction, it is time: a premium has two parts, intrinsic value and time value. Intrinsic value is the money you would get by exercising right now; time value is the money paid for the chance that the contract still has time to move in your favor. A 0DTE contract expires the same day, so its time value falls to zero at the close — the closer the close gets, the faster the premium decays.
Theta measures roughly how much premium is lost each day that passes. It is a rough number, not an exact forecast: the actual premium also moves with the underlying and with volatility. A 0DTE contract has only the rest of the day left, so a whole day of theta decay has to happen within a few hours — the time value inside the premium is highest in the morning and shrinks toward the 4:00 p.m. ET close. A contract in a buyer’s hands gets cheaper every hour, unless the move is fast and far enough to cover the decay.
A 0DTE contract expires the same day and never carries overnight, so the move only has a few hours to play out. The buyer needs the move to go far enough on the same day to cover the premium and the fees; as expiry approaches, time value keeps shrinking, and a contract that has not reached the strike by the close expires worthless. For the seller, if the move never reaches the strike, the time-value part of the premium collected stays. That is the expiry mechanism itself, not a promise of profit — if the move goes the wrong way, the seller must honor the contract, and a naked short can lose far more than the premium collected. Never read “time value decays” as “selling is a sure win.”
Above the order ticket the simulator shows how much time is left until the ET close, with a note that the premium decays over time if the index does not move, and “market closed” after the close; no new positions after 3:30 p.m. ET, and a prompt to close positions before 3:55 p.m. ET. Before placing an order, check the mid price and the bid-ask spread, and skip a strike whose spread is too wide. When you are starting out, begin with one single-leg long contract: first see clearly how much of the premium is time value and how it changes into the close, then try short legs and spreads. Write your exit plan before you open — how much profit to take, how much loss to cut, and what time to exit — all three before entry.
This simulator uses real CBOE option chains delayed about 15 minutes, starts with $10,000 in virtual funds, charges $0.65 per contract per side in fees, and shows P&L net of fees; short-sale margin is a simplified simulated rule at 20% of the strike, not a real broker margin. The simulator is for practicing orders, discipline, and review. It is not investment advice and promises no returns.
Back to the simulator | What is 0DTE? | Simulator Discipline | FAQ | How to Read the Option Chain | Expiry Day | Selling Margin | End-of-Day Review | What is SPX? | SPX vs SPY Options: What Is the Difference? | In, At, or Out of the Money | Implied Volatility | How to Write an Exit Plan | Call or Put