Difference between nominal and Z spread? between, someone, question

pogo

Can someone shed some light on this question? Thanks in advance.

canadiananalyst

Another way to say would be: Nominal is on the yield curve (curve of YTMs) and Z spread is on spot curve(curve of spot rates).

NakedPuts

So in what situation is it appropriate to use the nominal spread vs. z spread? Thanks again.

strikethree

use nominal only if they tell you that yield curve is flat.. that is the spread will remain the same until maturity

Analyze_This

z spread in the other cases if you don’t have an option on the bond

chandsingh

Of course is the yield curve is flat the nominal spread should equal the Z spread.
But as florin said, only use nominal if you are told to do so. Nominal is a inferior spread.

tobeornottobe

Quick sanity check:
Nominal  Static  OAS
Correct?

sabaruch

Should there be a bigger or equal to?