[wishart_washy]

From any options theory class you'll learn that you can create any complex position you want with options. If you want to synthetically create a future just buy a put and call at the same strike price, etc.

And all of this is really interesting except this is a terrible idea to open up to recreational traders. I say traders because when the average person thinks of options, they see it as a way to make leveraged bets and get rich quick. Likewise, institutions largely use derivatives (options, swaps, swaptions, etc.) to hedge their positions. The option, for an institution, is a hedging instrument, not a speculative instrument.

Here's the real reason this won't end well for most recreational traders - you're going to get scalped by the desk traders and algos at the prop shops for any illiquid options, and hit by the broader universe of trading algos out of the funds for any liquid options. You won't be able to see the order book and wouldn't know how to trade it even if you could see it. (@SIG @JaneStreet @DRW chime in)

But if you see this as a fun way to gamble knowing that the house (the Street) has a sizable built-in advantage, be my guest.

[throwawaymath]

I agree with the spirit of your comment. But this:

> The option, for an institution, is a hedging instrument, not a speculative instrument.

is not entirely correct. It's not at all uncommon for institutional capital to use options for directional leverage. Options are sophisticated derivatives for increasing upside, not just limiting downside.

[goodmattg]

Fair point. Looked back in my notes and can't find a percentile breakdown of the use of options in markets. For the derivatives markets as a whole less than 7% are even options.

[sulam]

Arguably, though, the ability to create straddles (and other multi-legged options) enables "recreational" traders to _lower_ their risk trading options. So while I agree with you in general, this particular change is specifically enabling smarter behavior.

[Patient0]

Minor nitpick: buy a call and sell a put to make a synthetic forward position

[pesmhey]

If one had access to the deep order book of some security, how would one start learning how to trade it?

[goodmattg]

This is literally what trading firms try to do. If you want to know more, ask a trader.