|With day trading rules, if you have more than 25K in your account, you can leverage many times over that. There should be regulations that prohibit someone with 16K in an account to be trading options with notional values over that amount, especially 50 times more!! |
It shouldn't matter if he's taking both side of the trade with a put/call combo, IMO.
Your examples are exactly why education is critical before trading stocks. There seems to be a massive the lack of knowledge, where the old expression "you swim with sharks, there's going to be blood spilled" (or some variation of these words) was always understood.