Nobody wants to run a credit check every time they buy an option. That just turns the premium into a fancy loan.

If you buy an option on an American options exchange, it is cleared by the OCC [1]. They are everyone's counterparty. There is a long chain of people who have to default for you not to get your money. (Basically, the financial system has to melt down in a nation-state ending way.)

I have no idea how Bitcoin options are being handled, but suffice it to say, counterparty risk dominates any other component.

[1] https://en.wikipedia.org/wiki/Options_Clearing_Corporation

Prior to the housing crash, multiple people figured out that CDOs were full of shit and bankers were committing massive fraud with mortgage bonds. Traders could purchase credit default swaps (CDSes) to capitalize on this risk and pay the premiums until the correction hit, at which point they'd cash in huge.

But uh, here's the problem: The same bankers that were investing in mortgage fraud (all of them) were the ones that would sell you the CDSes and cash your premiums. If the housing market was truly built on fraud and corruption - and it was - and banks could collapse - and they did, requiring a bailout that the banks knew was coming - maybe the bank wouldn't be solvent enough to pay you on your bet that you so rightfully won. Your largest upside win is capped, and thus the entire trade could be easily net negative.