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I want you to try something right now. Take a guess at where the S&P 500 is going to open tomorrow morning. Go ahead, pick a direction.
Chances are, you’re essentially flipping a coin. And that’s completely normal — forecasting overnight direction with any real accuracy takes a very special skill set. Most traders can’t do it consistently. But there is a way to make it not only possible but highly accurate over 75% of the time.
The secret lies in a market force that has reshaped the financial landscape since COVID. 0DTE options now make up more than half of all daily options volume. That shift changed the entire structure of how markets move, especially overnight, because these ultra short-dated contracts create massive and predictable hedging requirements for market makers.
The Market Force Hiding in Plain Sight
This rise in 0DTE volume is not just a trend — it’s a structural overhaul. With so many contracts expiring every day, market makers are constantly adjusting their hedges to stay balanced.
Those adjustments leave a powerful footprint, and once you understand how to read it, you can see where the S&P 500 is most likely headed before the next morning arrives.
The process begins right after the closing bell. By pulling all 0DTE options data on SPY at 4:05 p.m., you capture every last trade, including those final moments of heavy positioning. That timing matters because it represents the complete picture of the next day’s expiring options, not a partial snapshot from earlier in the afternoon.
Once you net the calls against the puts, the signal becomes clear. When calls dominate, market makers are effectively short shares. In extreme cases, this can mean being short hundreds of millions of shares of SPY. To get back to delta neutral, they must buy the underlying — and that mechanical buying pressure pushes prices higher overnight.
When puts outweigh calls, the hedging flows flip. Market makers must sell shares to stay balanced, creating downward pressure that often shows up in the overnight session.
None of this is emotional or speculative. It is math, mechanics and obligation.
Why Timing and Real Examples Matter
One real example of this happened on Feb. 23. The 0DTE data showed heavy put dominance going into the close. By the next morning, the market had done exactly what the hedging flows implied — it moved sharply lower. This type of move is the natural result of billions in expiring options forcing market makers to react.
These insights have contributed to an approach that has produced a 75% win rate with strong average returns. But even with an edge this powerful, no strategy is perfect.
There is no magic 8-ball in trading and losses will always be part of the game. This is why risk management matters as much as the signal itself. No single overnight setup deserves an all-in approach, no matter how strong the data looks.
Most traders still lean on headlines, sentiment or gut feel to predict overnight moves. But the real advantage comes from understanding what market makers must do — not what they might do.
When 0DTE options dictate hedging pressure, the overnight direction becomes far more transparent than most realize.
Once you learn how to read that pressure, the overnight market stops feeling random and starts looking surprisingly predictable.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
