Option Adjusted Spread - OAS
What Does Option Adjusted Spread - OAS Mean?
Mainly used for fixed-income products, OAS measures the yield spread that is not directly attributable to the security's characteristics.
Investopedia explains Option Adjusted Spread - OAS
This is a measurement tool for evaluating price differences between similar products with different embedded options. A larger OAS implies a greater return for greater risks.
Related Links
- Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.
- Advanced Bond Concepts: Duration - Bonds with higher duration carry more risk, making this measure an important one for investors to calculate.
