The stress test analysis tool enables you to see how potential future price changes can affect the profits/losses in your portfolio.
For example, if you hold Apple stock and want to know the potential impact of a 5% decline in the stock price, the stress analysis tool can provide a clear demonstration of this scenario.
- What is the stress test analysis tool?
- How can I access the stress test analysis tool?
- What instruments does the stress test analysis cover?
- How do I use the stress test analysis when holding margin products?
What is the stress test analysis tool?
The stress test analysis serves as a risk management tool that offers insights into potential profits and losses based on different price changes. It categorizes your portfolio holdings by product or asset class and illustrates the cumulative impact on your portfolio during a specific market stress scenario.
For instance, for all positions in an underlying equity, you can assess how a 5, 10, 20, 35, 50 or 100% price change may affect your profits and losses. The projected potential increase or decline is customized to the specific asset class, considering the varying levels of volatility.
Green and red numbers indicate potential profits or losses, as illustrated in the example below:
The calculation of potential profit or loss is based on your account's base currency. For instance, if your base currency is EUR and you have holdings in USD-denominated instruments, fluctuations in the EUR/USD currency pair will affect your profit or loss. This impact can be observed in the FX section.
The stress test values are based on theoretical mid prices that might differ significantly from actual tradable prices, especially in volatile markets.
How can I access the stress test analysis tool?
You can access and use the stress test analysis tool by following these steps:
Navigate to Portfolio > Choose a specific account or All accounts under Accounts > Click Analysis > Stress test.
What instruments does the stress test analysis cover?
As of now you can use the stress test analysis tool for all instruments except bonds. Your instruments are grouped by product or asset class, allowing you to navigate your positions easily.
How do I use the stress test analysis for margin products?
When holding margin products, the impact of stress test analysis becomes even more significant. Margin products allow you to borrow funds to invest, amplifying potential gains and losses.
The stress test analysis tool is available for all margin products such as CFDs. Given that your exposure can exceed your account value with margin products, the displayed potential loss may be larger than your current account value.
It is important to note that when holding margin products, you must adhere to maintenance margin requirements. Failure to meet these requirements can result in a force closure of some or all your positions.
For further information on maintenance margin, click here.