Embedded option

An option written into a bond's terms: the issuer's right to call it early, the holder's right to put it back, or a conversion feature.

A call option belongs to the issuer, so it is exercised when rates fall and refinancing is cheaper, which caps the holder's gain and creates negative convexity.

The yield quoted on such a bond has to be adjusted for the option's value, which is what the option-adjusted spread measures.

Read the terms. A bond with a call is a different instrument from one without.