标题: OAS [打印本页]

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作者: soverby    时间: 2011-7-13 13:24     标题: OAS

Why are the following buy signals(cheap securities)? Thanks.

large OAS
low option cost

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作者: Pegasus2008    时间: 2011-7-13 13:24

Remember large OAS means large spread (large cd rate). because of embedded options
Low option cost (remember options are cheap you need to buy)

Option cost = Z-spread - OAS. When OAS is large, the option cost is low.

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