From f251c53f92c1175f2483ac8c0af0569cff88bc16 Mon Sep 17 00:00:00 2001
From: Celes Renata <celes@frameshift.net>
Date: Wed, 22 Apr 2026 02:07:24 +0000
Subject: [PATCH] fix: risk engine blocking sell orders on over-concentrated
 positions

Two bugs: (1) trading engine omitted estimated_value from sell order
jobs, causing risk engine to compute 0 reduction; (2) risk engine
applied position size limits to sells, trapping users in positions
they couldn't exit. Sells now always pass position value/pct checks.
---
 services/risk/engine.py    | 41 +++++++++++++++++++++++++++-----------
 services/trading/engine.py |  6 +++++-
 2 files changed, 34 insertions(+), 13 deletions(-)

diff --git a/services/risk/engine.py b/services/risk/engine.py
index 25d6532..bfbc5cf 100644
--- a/services/risk/engine.py
+++ b/services/risk/engine.py
@@ -302,16 +302,24 @@ def _check_max_position_size(
         new_total_value = max(existing_value - order.estimated_value, 0.0)
     else:
         new_total_value = existing_value + order.estimated_value
+
+    # Sell orders always pass position value check — they reduce exposure
+    if order.action == "sell":
+        value_result = RiskCheckResult.PASS
+        value_verb = "within (sell reduces exposure)"
+    elif new_total_value <= limits.max_position_value:
+        value_result = RiskCheckResult.PASS
+        value_verb = "within"
+    else:
+        value_result = RiskCheckResult.FAIL
+        value_verb = "exceeds"
+
     checks.append(RiskCheckDetail(
         check_name="max_position_value",
-        result=(
-            RiskCheckResult.PASS
-            if new_total_value <= limits.max_position_value
-            else RiskCheckResult.FAIL
-        ),
+        result=value_result,
         message=(
             f"Position value {new_total_value:.2f} "
-            f"{'within' if new_total_value <= limits.max_position_value else 'exceeds'} "
+            f"{value_verb} "
             f"limit {limits.max_position_value:.2f}"
         ),
         threshold=limits.max_position_value,
@@ -323,16 +331,25 @@ def _check_max_position_size(
         position_pct = new_total_value / state.portfolio_value
     else:
         position_pct = 1.0 if new_total_value > 0 else 0.0
+
+    # Sell orders that reduce concentration should always pass — blocking a
+    # sell on an over-concentrated position prevents the user from fixing it.
+    if order.action == "sell":
+        pct_result = RiskCheckResult.PASS
+        pct_verb = "within (sell reduces exposure)"
+    elif position_pct <= limits.max_position_pct:
+        pct_result = RiskCheckResult.PASS
+        pct_verb = "within"
+    else:
+        pct_result = RiskCheckResult.FAIL
+        pct_verb = "exceeds"
+
     checks.append(RiskCheckDetail(
         check_name="max_position_pct",
-        result=(
-            RiskCheckResult.PASS
-            if position_pct <= limits.max_position_pct
-            else RiskCheckResult.FAIL
-        ),
+        result=pct_result,
         message=(
             f"Position {position_pct:.4f} of portfolio "
-            f"{'within' if position_pct <= limits.max_position_pct else 'exceeds'} "
+            f"{pct_verb} "
             f"limit {limits.max_position_pct:.4f}"
         ),
         threshold=limits.max_position_pct,
diff --git a/services/trading/engine.py b/services/trading/engine.py
index 9a1e4e6..5c9001b 100644
--- a/services/trading/engine.py
+++ b/services/trading/engine.py
@@ -728,6 +728,7 @@ class TradingEngine:
                                 "side": "sell",
                                 "quantity": sell_qty,
                                 "order_type": "market",
+                                "estimated_value": estimated_proceeds,
                                 "source": "trading_engine",
                             }
                             if self.redis is not None:
@@ -1813,14 +1814,17 @@ class TradingEngine:
                     self.portfolio_state.active_pool += current * qty
 
     async def _submit_sell_order(
-        self, ticker: str, quantity: int, reason: str
+        self, ticker: str, quantity: int, reason: str,
+        estimated_value: float = 0.0,
     ) -> None:
         """Push a sell order to the broker queue via Redis."""
         order_job = {
             "ticker": ticker,
             "action": "sell",
+            "side": "sell",
             "quantity": quantity,
             "order_type": "market",
+            "estimated_value": estimated_value,
             "source": "trading_engine",
             "reason": reason,
         }