Risk Server

The Risk Server monitors account profit and loss, enforces risk limits, and manages account state transitions based on trading activity. It tracks each account's net position, buying power consumption, and realized/unrealized profit and loss. When an account exceeds its configured loss threshold, the server automatically transitions the account through risk states from active trading to closed orders mode, and ultimately to disabled or liquidation if losses continue. By centralizing risk monitoring and enforcement, the server protects both individual accounts and the overall system from excessive exposure.

The Risk Server integrates with the Service Locator for authentication, the Order Execution Server to monitor trades, the Market Data Server for price discovery, the Administration Server for risk parameters, and a MySQL database to persist risk parameters and inventory snapshots.

Configuration

The Risk Server is configured via a YAML file with three top-level sections: server, service_locator, and data_store. Below is the structure of the configuration file with example values:

server:
  # Primary network interface and port the Risk Server binds to.
  interface: "0.0.0.0:20600"
  # List of addresses the server is reachable at (for registration with Service Locator).
  # Typically includes both public-facing and local addresses.
  addresses: ["198.51.100.5:20600", "10.0.0.5:20600"]

service_locator:
  # The address of the Service Locator (host:port).
  address: "10.0.0.5:20000"
  # The account username used by the Risk Server to authenticate with the Service Locator.
  username: risk_server
  # The password for the Risk Server's Service Locator account.
  password: [REQUIRED]

data_store:
  # The address of the MySQL server.
  address: "127.0.0.1:3306"
  # The username used to authenticate with MySQL.
  username: spireadmin
  # The password for the MySQL user.
  password: [REQUIRED]
  # The name of the database schema where data is stored.
  schema: spire

A setup.py script is provided to generate the final config.yml from the config.default.yml template. Usage:

  --local 0.0.0.0                 # Local interface (default: auto-detected IP)
  --world 198.51.100.5            # Global/public interface (optional)
  --address 10.0.0.5:20000        # Service Locator address (default: local_interface:20000)
  --password [REQUIRED]           # Service password for authentication
  --mysql_address 127.0.0.1:3306  # MySQL server address
  --mysql_username spireadmin     # MySQL username
  --mysql_password secretpw       # MySQL password (default: --password if omitted)

Risk Parameters

Each account is assigned risk parameters that govern its trading limits and risk enforcement behavior:

Currency - The currency used for risk calculations and loss limits
Buying Power - Maximum amount of capital available for trading
Allowed State - The risk state the account is permitted to operate in
Net Loss Threshold - Maximum net loss before transitioning to closed orders mode
Transition Time - Duration allowed in closed orders mode before automatic liquidation

Risk States

Accounts progress through the following risk states based on their profit and loss:

Active - Normal trading with full permissions
Closed Orders - No new orders allowed; existing positions may be closed
Disabled - Trading prohibited; positions automatically liquidated

When an account's net loss exceeds its configured threshold, the server automatically transitions the account to closed orders mode and starts a timer. If the account does reduce its loss above the threshold within the transition time, the account transitions to disabled.

Inventory Tracking

The server maintains real-time inventory snapshots for each account, tracking:

Open positions by security
Cost basis and average entry price
Realized and unrealized profit and loss
Buying power consumption

Inventory updates occur on every execution report, ensuring accurate position tracking across all trading venues.

Regional Scoping

Risk parameters and state transitions can be scoped by region (country, venue, or security). This enables fine-grained control over risk exposure in specific markets or asset classes.

Utility Scripts

Position Report

Reports current positions for accounts in CSV format:

  --config config.yml       # Configuration file
  --account trader1         # Specific account (optional; reports all if omitted)

Output format:

Account,Security,Currency,Side,Open Quantity,Cost Basis

Manual Order Entry

Manual Order Entry (MOE) utility for opening or closing positions without market execution. These orders are synthetic and do not interact with external venues:

  --config config.yml           # Configuration file
  --positions positions.csv     # CSV file with positions to MOE
  --account trader1             # Specific account (optional)
  --region CA                   # Region filter (country/venue/security)

The positions CSV uses the following format:

Account,Security,Currency,Side,Open Quantity,Cost Basis

Reset Risk States

Resets risk state for a specific region, clearing accumulated profit/loss tracking:

  --config config.yml       # Configuration file
  --region CA               # Region to reset (country code, venue, or security)

This utility is typically used at the start of a trading day or after maintenance periods to reset risk calculations.

Management

The Risk Server is controlled using three operational scripts: start.sh, stop.sh, and check.sh.

start.sh

Exits immediately if the server is already running.
Creates a logs/ directory if necessary.
Moves any existing srv_*.log files into logs/.
Starts the RiskServer process in the background.
Reads network interfaces from config.yml and waits until the server is listening on at least one configured address.

This ensures the server is fully initialized before the script exits.

stop.sh

Sends SIGINT to request a graceful shutdown.
Waits for termination using exponential backoff (up to 300 seconds).
Sends SIGKILL if the server fails to stop cleanly.
Appends a forced-termination message to the most recent log file (if applicable).

This guarantees consistent shutdown behavior across normal and exceptional conditions.

check.sh

The check.sh script verifies whether the server is currently running by inspecting the PID recorded in pid.lock and testing whether the associated process exists.

Logging

Upon startup, older log files are moved into the logs/ directory.

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