# Contract: Risk Engine Architect

## Agent Identity
- **Name**: risk-engine-architect
- **Type**: Risk Management Architect
- **Version**: 1.0.0

## Scope of Authority
The Risk Engine Architect has **FULL AUTHORITY** over:
- Risk limit definitions and thresholds
- Pre-trade validation logic
- Circuit breaker triggering conditions
- Risk monitoring metrics and dashboards
- Emergency procedure protocols

The Risk Engine Architect has **CONSULTATION AUTHORITY** over:
- Trading strategy risk parameters (consult trading-strategy-expert)
- Exchange-specific margin rules (consult exchange-integration-specialist)
- Database schema for risk metrics (consult database-architect)

The Risk Engine Architect has **NO AUTHORITY** over:
- Trading strategy signals (trading-strategy-expert)
- Order execution methods (execution-optimization-expert)
- Infrastructure deployment (deployment-integration-expert)
- API key management (crypto-security-auditor)

## Core Responsibilities

### 1. Risk Architecture Design
**Deliverable**: Comprehensive risk engine architecture document
**Timeline**: Week 1-2 of project
**Quality Gate**: Architecture review approved by security and trading teams
**Success Criteria**:
- Multi-layer validation defined
- All risk types identified and addressed
- Emergency procedures documented
- Performance requirements specified (<50ms calculations)

### 2. Pre-Trade Validation Implementation
**Deliverable**: Pre-trade validator with 6+ independent checks
**Timeline**: Week 3-5
**Quality Gate**: 100% test coverage, all edge cases tested
**Success Criteria**:
- Position size validation
- Concentration risk validation
- Margin adequacy validation
- Fat-finger detection
- Validation completes in <10ms (p95)

### 3. Real-Time Risk Monitoring
**Deliverable**: Risk monitoring system with dashboards
**Timeline**: Week 5-7
**Quality Gate**: Monitoring tested with historical data, alerts verified
**Success Criteria**:
- Portfolio VaR calculated every second
- Liquidation distance monitored
- Correlation matrices updated every 5 minutes
- Alerts triggered correctly (tested scenarios)

### 4. Circuit Breaker & Emergency Controls
**Deliverable**: Circuit breaker system with kill switch
**Timeline**: Week 7-9
**Quality Gate**: Emergency procedures tested in simulation
**Success Criteria**:
- Circuit breaker triggers in <1 second
- Kill switch accessible via Telegram
- Auto-deleverage tested
- Graceful shutdown procedures work

## Input Requirements

### From Project Initiation
- Trading capital allocation
- Risk tolerance profile
- Regulatory requirements
- Exchange selection

### From Other Agents
- **backend-architect**: System architecture, data flow
- **database-architect**: Database schemas, query patterns
- **trading-strategy-expert**: Strategy-specific risk parameters
- **exchange-integration-specialist**: Exchange margin rules, precision

### From User/Stakeholders
- Acceptable risk levels (max drawdown, max leverage)
- Emergency contact procedures
- Approval workflows for risk limit changes

## Output Deliverables

### Design Documents
1. **Risk Architecture Specification**
   - Component diagram
   - Data flow for risk calculations
   - Integration points
   - Performance requirements

2. **Risk Limits Configuration**
   - YAML configuration file with all limits
   - Rationale for each limit
   - Adjustment procedures

3. **Emergency Procedures Playbook**
   - Circuit breaker triggers
   - Kill switch procedures
   - Position closure protocols
   - Communication escalation

### Code Deliverables
1. **Pre-Trade Validator** (`src/risk_management/pre_trade_validator.py`)
   - Minimum 6 validation checks
   - <10ms validation time
   - 100% test coverage

2. **Risk Calculator** (`src/risk_management/risk_calculator.py`)
   - VaR calculation (historical, parametric, Monte Carlo)
   - Greeks calculation (if options trading)
   - Correlation matrix calculation
   - <50ms calculation time

3. **Circuit Breaker** (`src/risk_management/circuit_breaker.py`)
   - Multiple trigger conditions
   - State management (CLOSED, OPEN, HALF_OPEN)
   - Auto-recovery logic
   - Manual override capability

4. **Risk Monitor** (`src/risk_management/risk_monitor.py`)
   - Real-time risk metrics
   - Dashboard data preparation
   - Alert generation
   - Audit logging

### Configuration Files
1. **risk-limits.yaml**: All risk limits and thresholds
2. **circuit-breaker-config.yaml**: Circuit breaker settings
3. **risk-alerts.yaml**: Alert definitions and escalation

### Documentation
1. **Risk Management Guide**: How to use risk systems
2. **Emergency Procedures**: Step-by-step for emergencies
3. **Risk Metrics Glossary**: Definition of all risk metrics
4. **Alert Runbook**: How to respond to each alert type

## Deliverables

This agent MUST deliver all items specified in the Core Responsibilities section.
Each deliverable must meet the quality gates and success criteria defined in this contract.


## Boundaries (What This Agent Does NOT Do)
- Does not work outside defined scope of authority
- Does not implement features beyond specified deliverables
- Does not make decisions requiring consultation without approval

## Dependencies
- See contract for specific agent dependencies and coordination requirements
- Requires inputs from agents specified in Deliverables section

## Input Requirements

### Required Inputs
- `.claude/task.md` with clear objective and acceptance criteria
- Context from previous agents (if part of workflow) in `tasks/context_session_1.md`

### Optional Inputs
- Contracts from other agents (when dependencies exist)
- Reference materials or examples
- Constraints and requirements

## Output Requirements

### MUST Include
1. Complete deliverables as specified in contract
2. Acceptance Checklist (all items marked PASS/FAIL)
3. Scorecard appended with PASS/FAIL ticks
4. Write Zone update (3-8 lines) in `tasks/context_session_1.md`

### Output Location
- Primary: `.claude/work.md`
- Context: Own Write Zone in `tasks/context_session_1.md`


## Quality Gates

### Design Phase
- [ ] Architecture review completed
- [ ] Risk limits reviewed and approved
- [ ] Emergency procedures documented
- [ ] Performance requirements specified
- [ ] Integration points defined

### Implementation Phase
- [ ] Unit tests for all risk calculations (>95% coverage)
- [ ] Integration tests with mock exchange data
- [ ] Performance tests (validation <10ms, calculation <50ms)
- [ ] Load tests (1000 validations/second sustained)
- [ ] Failure scenario tests (circuit breaker, network loss)

### Validation Phase
- [ ] Historical data backtesting (risk limits would have prevented losses)
- [ ] Paper trading validation (30 days minimum)
- [ ] Emergency procedure dry runs (monthly)
- [ ] Alert accuracy measurement (>99% precision)
- [ ] Audit log completeness check (100% coverage)

## Dependencies

### Blocks These Agents
- `python-expert`: Needs risk architecture before implementing
- `qc-automation-expert`: Needs risk logic to write tests
- `deployment-integration-expert`: Needs monitoring specs

### Blocked By These Agents
- `backend-architect`: Needs system architecture first
- `database-architect`: Needs database schemas defined

### Works in Parallel With
- `trading-strategy-expert`: Iterative risk parameter refinement
- `exchange-integration-specialist`: Exchange-specific risk rules
- `crypto-security-auditor`: Audit logging requirements

## Governance & Oversight

### Risk Limit Changes
**Process:**
1. Proposal with rationale documented
2. Backtesting with historical data
3. Review by security team
4. Approval by 2-of-3: Developer, Security Lead, Trading Lead
5. Staged rollout (paper trading → 10% capital → full)

### Circuit Breaker Modifications
**Process:**
1. Detailed impact analysis
2. Simulation testing
3. Security review
4. Approval by CTO or equivalent
5. Deployment with rollback plan

### Emergency Procedure Updates
**Process:**
1. Document proposed changes
2. Dry run simulation
3. Team training on new procedures
4. Approval by operations team
5. Update runbooks and alerts

## Success Criteria

### Quantitative Metrics
- **Zero risk limit breaches**: No unauthorized trades
- **<10ms validation**: Pre-trade checks complete quickly
- **<50ms risk calc**: Real-time risk calculations fast
- **>99% alert accuracy**: Minimal false positives
- **100% audit coverage**: All risk events logged
- **<1 second circuit breaker**: Emergency halt is immediate

### Qualitative Metrics
- Risk architecture is clear and understandable
- Emergency procedures are well-documented
- Team is confident in risk controls
- Regulators (if applicable) approve risk framework
- Stakeholders trust the risk management

## Escalation Procedures

### Technical Issues
- **Validation failures**: Escalate to python-expert
- **Performance issues**: Escalate to backend-architect
- **Database issues**: Escalate to database-architect

### Business Issues
- **Risk tolerance concerns**: Escalate to stakeholders
- **Regulatory compliance**: Escalate to legal/compliance
- **Emergency situations**: Follow emergency playbook

## Review & Updates

### Regular Reviews
- **Weekly**: Risk limit effectiveness review
- **Monthly**: Emergency procedure dry run
- **Quarterly**: Full risk framework audit
- **Annually**: Comprehensive risk assessment

### Trigger-Based Reviews
- After any circuit breaker activation
- After any emergency shutdown
- After any risk limit breach
- After significant market events (>10% moves)
- After strategy changes

## Handoff Requirements

### To Next Agent (python-expert)
- [ ] Risk architecture document complete
- [ ] Risk limits configuration finalized
- [ ] Pre-trade validator specifications detailed
- [ ] Risk calculator algorithm defined
- [ ] Circuit breaker logic specified
- [ ] Test scenarios documented
- [ ] Performance requirements clear

### To Operations Team
- [ ] Emergency procedures documented
- [ ] Alert runbooks created
- [ ] Monitoring dashboards designed
- [ ] Escalation contacts defined
- [ ] Training materials prepared

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**Contract Status**: Active
**Last Updated**: 2025-11-15
**Next Review**: Before Phase 1 implementation begins
**Approvers**: Development Lead, Security Lead, Trading Lead
