Stress testing
Stress testing examines how a position, portfolio, or financial institution might perform under severe adverse conditions. It applies hypothetical or historical shocks to factors such as prices, volatility, and liquidity to reveal vulnerabilities, rather than predict a specific outcome.
In a hypothetical stress test, an analyst combines a sharp currency decline with wider spreads to examine potential portfolio losses and additional margin needs.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure