Nancy Davis on Why She Buys Options While Everyone Sells

On a tastylive guest spot, Nancy Davis, chief investment officer and managing partner at Quadratic Capital Management, lays out a view that cuts against the grain of a premium selling audience: she mostly buys options rather than sells them, leaning long convexity so she is positioned for the big surprise rather than collecting small premiums. With the market having flipped from pricing rate cuts to pricing hikes, she thinks a lot is already in the price. She also makes the case that the yield curve, which has flattened sharply, is a cleaner read on real inflation expectations than any single government index, since it reflects what borrowers worldwide actually pay in dollars. Her contrarian take into the Fed: she will take the under on how much they hike. Views are the speakers' own. Education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 A wild time in the rates market 01:00 Why one CPI misses real inflation 03:00 From rate cuts to rate hikes 05:00 The yield curve as an inflation gauge 07:00 Taking the under on Fed hikes 09:30 Why she buys options instead of selling 12:00 Positioning for the big surprise 14:00 What she is watching next #tastylive #nancydavis #quadratic #ivol #interestrates #yieldcurve #inflation #longvolatility #optionstrading #tastytrade tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.