CREDIT
Option-Adjusted Spread
Separates modeled option effects from spread compensation.
Formula
OAS = model spread after adjusting for embedded-option value
Variables: Model paths; option-adjusted cash flows; spread
What it means
Separates modeled option effects from spread compensation.
Example
For a callable bond, OAS removes the modeled value of the issuer's call option from conventional spread analysis.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Formulas
BondStats reference content is independently written. Mathematical relationships, abbreviations and market conventions are presented for educational and analytical use.