Great review of the issues here. When you talk about options trading, you need market makers. A key attribute of a market maker is that they have the ability t

Great review of the issues here. When you talk about options trading, you need market makers. A key attribute of a market maker is that they have the ability to absorb huge losses through other investments by creating synthetic counterparts to their options to hedge risk through their HFT platforms. Without that, you're a sitting duck. This is what Goldman or other large investment firms provide. Derivabit might work as an OTC options exchange, but the minute a large market maker arrives and provides liquidity, the OTC market will move to them. Basically, it's really hard to displace traditional market makers because you need a bigger pile of money than them. You can't do that as a startup. You basically have to be a bank to start an options trading desk because otherwise they can (legally) run you out of the market.