In response to the growing demand for short-term options trading, Nasdaq has recently launched two-week options contracts that expire on Wednesdays. These new contracts are based on non-stock products such as the United States Oil Fund (USO), United States Natural Gas Fund (UNG), SPDR Gold Shares (GLD), iShares Silver Trust (SLV), and iShares 20+ year Treasury Bond ETF (TLT).

The expansion of short-term options trading beyond stocks into other asset classes reflects the increasing popularity of these instruments among both hedge funds and retail traders. Previously, options contracts typically expired on Fridays; however, the most popular stock indexes now have contracts expiring on every day of the week, enabling "zero-day to expiration" (0DTE) options trading.

The introduction of Wednesday expirations for these non-stock products brings new asset classes a step closer to the reality of more alternative expirations. The Securities and Exchange Commission approved Nasdaq's proposal for the new options contracts on November 13th.

Trading in options contracts that are about to expire has seen significant growth in recent years. Data from Cboe shows that the percentage of options trading on the S&P 500 with contracts expiring in less than a day has surged from 8% in 2018 to at least 42% on a monthly basis this year. Traders are drawn to these short-term options as they provide opportunities to take positions on specific events happening within a day, such as the release of Federal Reserve policy statements that occur eight times a year.

The rise of short-term options trading has sparked differing opinions on Wall Street. JPMorgan strategist Marko Kolanovic has expressed concerns about the potential for increased volatility and potential market disruptions, reminiscent of the "volmageddon" event in February 2018. However, not all experts share the same worries, with some arguing that the spreading out of risk across an entire month actually makes it less risky.

Nasdaq has reassured investors that it does not anticipate any "market disruptions" resulting from the introduction of the new Wednesday options. The company's rule change proposal emphasized the general investor demand for alternative expirations and the significant volume of Wednesday expirations observed in popular index products.

As the popularity of short-term options trading continues to grow, investors and analysts will closely monitor the impact of these new contracts on market volatility and overall market stability.

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