The Importance of Having Stops in Zero DTE Trading

When trading Zero DTE options, it is crucial to have stop-loss orders in place to manage risk. With the rapid movement of low delta out-of-the-money options, the gamma can quickly catch traders off guard. Stop-loss orders help protect against sudden market movements by triggering the exit of a trade when a predetermined price is reached. However, the execution of stop-loss orders can be challenging, especially with certain brokers. It is important to understand the differences between native stops and simulated stops, as well as the risks associated with each type. Being aware of these risks and using the appropriate stop order type can help improve execution and prevent catastrophic losses.