SPX and SPY both track the S&P 500, and both have liquid same-day-expiration options — but they differ in ways that matter for 0DTE. This is educational only and not advice; understand each difference before trading either.

Settlement and assignment

• SPX options are cash-settled and European-style (no early assignment). At expiration you settle a cash amount; there is no risk of being assigned shares intraday.
• SPY options are physically settled and American-style, so in-the-money options carry early-assignment risk into 100 shares of the ETF per contract.

Contract size and notional

SPX is roughly 10× the notional of SPY (SPX tracks the index level; SPY is about 1/10th of it). One SPX contract therefore carries much larger notional risk than one SPY contract — position sizing must account for this.

Tax treatment

SPX options are commonly treated as Section 1256 contracts (60/40 long/short-term), while SPY options are taxed as standard equity options. Tax treatment depends on your jurisdiction and situation — confirm with a qualified tax professional.

Liquidity and spreads

Both are highly liquid. SPY often shows penny-wide strikes and very tight spreads at retail size; SPX has deep liquidity at larger notional. Liquidity and spread quality should drive which instrument fits your size and plan.

Choosing between them

There is no "better" instrument — only the one that fits your account size, assignment tolerance, tax situation, and risk plan. Whichever you study, define max loss, check liquidity and the expected move, and size the trade before entry.