From 3b49aa2fa272e03fe5c0fb498c5ee84197033302 Mon Sep 17 00:00:00 2001
From: Celes Renata <celes@frameshift.net>
Date: Tue, 21 Apr 2026 20:25:02 +0000
Subject: [PATCH] fix: risk engine now allows sells on over-concentrated
 positions

---
 services/risk/engine.py   |  5 ++++-
 tests/test_risk_engine.py | 18 ++++++++++++++++++
 2 files changed, 22 insertions(+), 1 deletion(-)

diff --git a/services/risk/engine.py b/services/risk/engine.py
index f0a9dc9..25d6532 100644
--- a/services/risk/engine.py
+++ b/services/risk/engine.py
@@ -298,7 +298,10 @@ def _check_max_position_size(
 
     # Check max position value
     existing_value = state.positions_by_symbol.get(order.ticker, 0.0)
-    new_total_value = existing_value + order.estimated_value
+    if order.action == "sell":
+        new_total_value = max(existing_value - order.estimated_value, 0.0)
+    else:
+        new_total_value = existing_value + order.estimated_value
     checks.append(RiskCheckDetail(
         check_name="max_position_value",
         result=(
diff --git a/tests/test_risk_engine.py b/tests/test_risk_engine.py
index 1a2e483..8a44ed7 100644
--- a/tests/test_risk_engine.py
+++ b/tests/test_risk_engine.py
@@ -254,6 +254,24 @@ def test_position_pct_exceeded():
     assert any(c.check_name == "max_position_pct" and c.result == RiskCheckResult.FAIL for c in result.checks)
 
 
+def test_sell_on_over_limit_position_allowed():
+    """Selling an over-concentrated position should pass risk checks."""
+    config = _make_config(position_limits=PositionLimits(max_position_pct=0.05))
+    state = _make_state(
+        portfolio_value=100_000,
+        positions_by_symbol={"AVGO": 5200.0},  # 5.2% — over the 5% limit
+    )
+    order = ProposedOrder(
+        ticker="AVGO", sector="Technology", action="sell",
+        estimated_value=5200.0, quantity=13,
+    )
+    result = evaluate_order(order, config, state)
+    pct_check = next(c for c in result.checks if c.check_name == "max_position_pct")
+    assert pct_check.result == RiskCheckResult.PASS, (
+        f"Sell on over-limit position should pass, got: {pct_check.message}"
+    )
+
+
 def test_max_shares_exceeded():
     config = _make_config(position_limits=PositionLimits(max_shares_per_order=100))
     order = ProposedOrder(ticker="AAPL", sector="Technology", estimated_value=1000, quantity=200)