Option-Adjusted Spread (OAS): A Practical Guide for Bond Investors
What Is Option-Adjusted Spread?
Option-Adjusted Spread, commonly abbreviated as OAS, is a yield-spread measurement that adjusts for embedded options in fixed-income securities. It expresses the extra yield investors demand over a comparable Treasury curve after stripping out the value of call, put, or prepayment features.
Why OAS Matters to Investors