Many traders notice the same thing shortly after the opening bell. They look at the SPX or SPY option chain and premiums appear unusually expensive compared to what the market is actually doing. Even small movements in price can show large option values, and trades that look reasonable on the chart can behave unpredictably once entered.
This is not random and it is not a platform issue. It is a normal part of how options are priced at the start of the trading day, especially with 0DTE contracts.
Understanding why this happens is important because early-session pricing conditions often matter as much as market direction.
What Happens Before the Market Opens
SPX options can trade outside regular U.S. market hours, but participation overnight is very different from the regular trading session. Liquidity is thinner, institutional positioning is limited, and many traders wait for the U.S. equity market to open before committing capital.
During the overnight period, news, global markets, earnings expectations, and economic data all accumulate. By the time the regular session begins, traders still do not know:
• whether the overnight gap will continue or reverse
• whether buyers or sellers will take control
• how large the first hour’s range will be
Market makers must still quote options immediately at the open. Because they are obligated to provide liquidity, contracts are priced based on expected movement rather than confirmed movement.
At the open, option prices reflect potential range, not just current price.
Why 0DTE Options Magnify the Effect
This pricing behavior exists in all options, but 0DTE contracts magnify it.
With longer-dated options, the market has time to stabilize and trends can develop over days or weeks. Short-term uncertainty matters less because there is time for conditions to change.
With 0DTE options, the entire life of the contract occurs in a single session. A move during the first hour can determine the outcome of the trade for the day. Because that possibility exists, early pricing must account for a wide range of outcomes.
As a result, premiums often start the day elevated relative to the index level.
This is why a trade can be directionally correct but still react slowly or unpredictably at first. The option price already reflected the possibility of movement.
The Role of Early-Session Volatility
The open is usually the most uncertain part of the trading day. Overnight positioning is still being adjusted, institutions are establishing exposure, and traders are reacting to news released before the bell.
Higher uncertainty produces higher implied volatility, and higher volatility leads directly to higher option premiums. Option pricing is not based only on direction. It is based on how much movement could occur.
As the market begins forming a structure and buyers and sellers reveal themselves, that uncertainty decreases.
Why Premiums Often Change Quickly
After the open, the market starts to define a range. Support and resistance levels become visible and order flow stabilizes. As this happens, option pricing adjusts.
Sometimes premiums contract because expected movement decreases. Other times they respond rapidly once direction becomes clearer. Both behaviors come from the same source: uncertainty is being resolved.
This is why option movement early in the session can look inconsistent compared to the chart. The contract is reacting to changing expectations, not only to price.
How This Affects Trading Decisions
Early trading is not simply about predicting direction. It is about recognizing whether pricing conditions support a manageable setup.
Some mornings, elevated premiums reflect genuine uncertainty and risk is difficult to control. Other mornings, the market establishes structure quickly and pricing aligns with a definable opportunity. The difference is subtle but important.
Trading at the open requires selectivity. The objective is not to participate in every movement, but to act when pricing and market behavior are consistent with a clear plan.
This is also why there are sessions when traders choose not to participate even though the market is open. We explain this decision process in more detail in our guide on why we do not trade every day. The decision is based on conditions rather than activity.
The opening period is also when many of the day’s directional moves begin to develop. Because 0DTE options have only hours remaining, early price behavior often has a larger influence on trade outcomes than later movement. Understanding early-session conditions therefore becomes especially important for traders who participate near the open.
Practical Takeaway
At the open, option prices primarily reflect uncertainty. As the session develops and structure forms, pricing behavior becomes easier to interpret.
For 0DTE trading, both direction and price paid matter. Understanding early-session pricing helps traders recognize when conditions are favorable and when patience is the better decision.
Learning how option pricing behaves is often as important as learning chart patterns.
(Last reviewed: February 2026)
About the Author
Tim Titus is the founder of SPX Option Trader. He has traded the markets since the late 1990s and focuses exclusively on SPX and SPY 0DTE options, providing insight based on daily live market participation.
Disclaimer
Options trading involves risk and may not be suitable for all investors. Please review our full disclaimer for details.