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

pogo

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

sabaruch

Should there be a bigger or equal to?

tobeornottobe

Quick sanity check:
Nominal  Static  OAS
Correct?

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.

Analyze_This

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

strikethree

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

NakedPuts

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

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).