Definitions for "Stress Testing"
The act of simulating different financial market conditions for their potential effects on a portfolio of financial instruments.
Using a variety of scenarios and assumptions, the value of a given position in derivatives and hybrids is put through a sensitivity test (a stress test) to determine the loss exposure of the firm to changes in market conditions.
Sensitivity analysis of a loan portfolio to learn how it would perform under different scenarios (i.e. high delinquency and high margins, high delinquency and rapid prepayment, etc.).
Playtest in which players seek to exploit the holes and weaknesses of a module in order to better the final design. 'No module survives contact with the enemy.' Not to be confused with Trashing. See Devil's Advocate.
Assures that a system performs with expected high volumes. Sufficient technical resources have been allocated so that operational capability can be maintained under maximum volume and pressure.