My SPY puts are going to expire worthless today. I don't really care about this one particular trade because it was a small position. But what I find most frustrating is how hard it is to make money on short trade these days. Most of my losses this year have all been on the short side of the risk. I figured with QE behind us, we would go back to a normal trading environment, but that doesn't seem to be the case.
I think part of the problem is that there is massive cash sitting on the side lines waiting to be invested in something and that creates upward pressure on risky asset. And the cash isn't just coming from traditional investors, but normal corporations who are all sitting on massive pile of cash. Apple inc, for example, has a cash balance of $73 billion dollars. In a normal economic environment, Apple would use that cash to build factories to expand their business. But that's not happening. The reason for this is that it is simply not profitable for companies to invest in added capacity and productivity these days.
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