Tessera Operations Runbook

This document is the on-call reference for Tessera live trading incidents. Every halt mechanism has its own entry: what triggered it, how to investigate, and how to safely resume.

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1. Kill Switch Reference

1.1 DAILY_LOSS — Daily portfolio loss > 3%

What triggered it The portfolio lost more than 3% of its start-of-day equity in a single session. KillSwitch.check_daily_loss() evaluates this on every bar.

How to investigate 1. Pull the fill log for today: data/live/fills.parquet. 2. Identify the largest losing positions and the bars on which they were opened. 3. Check whether the signal was a model error (stale features, data feed gap) or genuine adverse price action. 4. Confirm the loss is real: cross-check against the exchange position report. 5. Review tessera_kill_switch_active and tessera_drawdown_pct on Grafana.

How to resume

# Only after root-cause is understood and sign-off obtained.
uv run python -c "
from tessera.risk.kill_switch import KillSwitch
ks = KillSwitch()
ks.clear()
print('kill switch cleared')
"

Then restart the live process. Reset the day-start equity baseline in the config or the process will immediately re-fire if the position is unchanged.

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1.2 DRAWDOWN — Peak-to-trough drawdown > 8%

What triggered it The portfolio has fallen more than 8% from its all-time high equity since the process started. KillSwitch.check_drawdown() evaluates this every bar.

How to investigate 1. Plot the equity curve from data/live/fills.parquet to identify the peak and the period of decline. 2. Compare the drawdown to historical stress events (LUNA, FTX, USDC depeg) using the stress-test report in §3. 3. Check if the circuit breaker had already fired a SCALE_DOWN warning before this — if the circuit breaker was bypassed or its state was stale, fix it before resuming. 4. If the drawdown happened in < 30 minutes: look for a data-feed gap or misrouted order that caused an unintended large position.

How to resume Same procedure as DAILY_LOSS. Additionally reset _peak_equity in the process state so the old peak does not immediately re-fire.

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1.3 DATA_GAP — Data feed silent for > 30 seconds

What triggered it No market data tick was received for more than 30 consecutive seconds. KillSwitch.check_data_gap() is called on every bar iteration.

How to investigate 1. Check exchange WebSocket connectivity: curl -s https://api.binance.com/api/v3/ping. 2. Check system network: ping 8.8.8.8, check VPN / firewall rules. 3. Check Tessera process logs for "data_feed_gap" or WebSocket reconnect errors. 4. Check tessera_signal_latency_seconds on Grafana — a sudden spike indicates the event loop is blocked. 5. If the gap was brief (network blip): verify the reconnect restored the correct order book snapshot before re-enabling trading.

How to resume Confirm the data feed is live and delivering ticks. Then clear and restart:

# Verify feed is healthy first
uv run tessera ingest ohlcv --exchange binance --symbol BTCUSDT --start now

# Then clear
uv run python -c "from tessera.risk.kill_switch import KillSwitch; KillSwitch().clear()"

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1.4 ORDER_REJECT_RATE — Exchange rejecting > 5% of orders over 5 min

What triggered it More than 5% of orders submitted in the trailing 5-minute window were rejected by the exchange. KillSwitch.record_order_event() tracks this on every order.

How to investigate 1. Check exchange error responses in the fill log and structured logs (look for "order_rejected" events with the exchange error code). 2. Common causes: - Insufficient margin: account balance fell below maintenance margin. - Rate limit exceeded: too many orders per second; check TESSERA_ORDER_RATE_LIMIT. - Post-only conflict: market was moving too fast; limit price was immediately fillable and the exchange rejected the post-only flag. - Symbol halted: exchange suspended the instrument. 3. Check tessera_orders_total{status="rejected"} on Grafana.

How to resume Fix the root cause (add margin, reduce order rate, switch to MARKET orders if post-only is not appropriate). Then clear:

uv run python -c "from tessera.risk.kill_switch import KillSwitch; KillSwitch().clear()"

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1.5 POSITION_MISMATCH — Internal vs exchange positions disagree

What triggered it The reconcile loop found that Tessera's internal position book differs from the exchange REST position report by more than 1% for at least one symbol. KillSwitch.check_position_reconcile() detects this in a single call.

How to investigate 1. Pull the exact disagreement from the kill-switch trigger detail string (logged at CRITICAL level as "kill_switch_engaged"). 2. Compare fill log vs exchange trade history for the discrepant symbol. 3. Common causes: - Partial fill race: a fill arrived after Tessera's last reconcile snapshot — wait one reconcile interval and check again. - Manual trade on the exchange: someone placed an order from the web UI. - Fee deducted in base currency: some exchanges deduct fees in BTC, reducing the net position vs Tessera's expectation. - Order not acknowledged: network error caused Tessera to miss an ACK.

How to resume Once the cause is understood and positions are reconciled:

uv run python -c "from tessera.risk.kill_switch import KillSwitch; KillSwitch().clear()"

If the mismatch was due to a manual trade: flat the rogue position on the exchange first, then clear.

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1.6 MANUAL_SIGTERM — Process received SIGTERM

What triggered it The OS sent SIGTERM to the Tessera process. This could be a k8s pod eviction, a systemd service restart, a kill command, or a deployment rollout.

How to investigate 1. Check system logs: journalctl -u tessera.service -n 50 or k8s pod events. 2. Determine whether the SIGTERM was intentional (deploy, maintenance) or accidental (OOM killer, node eviction). 3. If OOM: check process memory usage; consider reducing feature_lookback or the number of tracked symbols.

How to resume If the restart was intentional, the kill switch clears automatically when the process restarts fresh (the kill switch is in-process state only, not persisted). If the restart was accidental, fix the underlying issue first.

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2. Circuit Breaker Reference

The circuit breaker state persists to Postgres and survives process restarts.

2.1 SCALE_DOWN (MTD −5%)

Effect: All new position sizes are halved (size_multiplier = 0.5). Existing positions are not automatically reduced.

How to investigate: Same as DAILY_LOSS above. Focus on whether the drawdown was model-driven or macro-driven. Check the stress-test report (§3).

Auto-recovery: None — the circuit breaker stays in SCALE_DOWN until the MTD return recovers above −5% or until manual_resume() is called.

To manually reset (after sign-off):

uv run python -c "
from tessera.risk.circuit_breaker import CircuitBreaker
cb = CircuitBreaker(dsn='$TESSERA_DB_URL')
cb.manual_resume()
print('circuit breaker reset to OK')
"

2.2 HALT_48H (MTD −10%)

Effect: All trading suspended for 48 hours.

Auto-recovery: The breaker returns to OK automatically after 48 hours (halt_until timestamp in Postgres). No manual action needed unless the cause requires remediation.

Check remaining halt time:

SELECT state, halt_until, halt_until - NOW() AS time_remaining
FROM tessera_circuit_breaker;

2.3 HALT_INDEFINITE (Peak-to-trough −15%)

Effect: All trading suspended indefinitely — requires human sign-off.

To resume (after investigation and written approval):

uv run python -c "
from tessera.risk.circuit_breaker import CircuitBreaker
cb = CircuitBreaker(dsn='$TESSERA_DB_URL')
cb.manual_resume()
"

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3. Fire Drill Procedure

Run this monthly in the paper environment to verify every kill switch and circuit breaker state works end-to-end.

3.1 Pre-drill checklist

• [ ] Grafana dashboard is live: tessera_kill_switch_active, tessera_circuit_breaker_state.
• [ ] Sentry project tessera-paper is configured with DSN in SENTRY_DSN.
• [ ] Paper environment is running against Binance testnet.
• [ ] Postgres is seeded with a fresh tessera_circuit_breaker row (state=OK).

3.2 Drill steps

Step	Action	Expected result
1	Set day_start_equity = 100000, push equity to 96800 (−3.2%)	Kill switch: DAILY_LOSS — Grafana annotation, Sentry CRITICAL alert
2	Clear kill switch. Set peak_equity = 100000, push to 94900 (−5.1% MTD)	Circuit breaker: SCALE_DOWN — size_multiplier = 0.5
3	Push equity to 89000 (−11% MTD)	Circuit breaker: HALT_48H — trading suspended
4	Force-expire halt_until. Push equity to 84000 (−16% drawdown from 100k peak)	Circuit breaker: HALT_INDEFINITE
5	Call manual_resume()	Circuit breaker: OK
6	Stop data feed for 35 seconds	Kill switch: DATA_GAP
7	Submit 15 rejected orders in 5 minutes	Kill switch: ORDER_REJECT_RATE
8	Inject exchange position {BTCUSDT: 1.5} vs internal {BTCUSDT: 1.0}	Kill switch: POSITION_MISMATCH fires in one reconcile call
9	Send SIGTERM to the process	Kill switch: MANUAL_SIGTERM, all positions flattened

3.3 Post-drill verification

1. Confirm every step produced a Grafana annotation under the tessera-paper org.
2. Confirm every CRITICAL trigger produced a Sentry issue with the correct tags.
3. Confirm no orders were submitted after any kill switch engaged.
4. Sign off the drill log in _decisions/decisions.md.

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4. Stress-Test Report

Tessera's circuit breakers were evaluated against three historical stress windows using real 1-minute OHLCV data from Binance.

4.1 LUNA / UST Depeg (May 6–13 2022)

Event	BTC peak-to-trough	ETH peak-to-trough	CB fires	Appropriate?
May 7 initial depeg	−14%	−17%	SCALE_DOWN (−5% MTD, Day 2)	✅ Yes — positions halved before the worst day
May 9 UST death spiral	−27%	−31%	HALT_48H (−10% MTD), then HALT_INDEFINITE (−15% drawdown)	✅ Yes — halt prevented further loss on May 9–12
May 12 LUNA collapse	N/A (already halted)	N/A	No new fires	✅ Correct — system was already in HALT_INDEFINITE

Assessment: The circuit breaker correctly escalated on Day 2 of the LUNA depeg, before the worst 48-hour window. The HALT_INDEFINITE would have required a manual review on May 10, which is appropriate given the unprecedented market conditions. The kill switch DRAWDOWN trigger at −8% would have fired even earlier (May 9 intraday) for any directional position.

4.2 FTX Collapse (Nov 6–11 2022)

Event	BTC peak-to-trough	CB fires	Appropriate?
Nov 6 Binance/FTT news	−6% intraday	SCALE_DOWN	✅ Yes — right to reduce
Nov 8 FTX halts withdrawals	−18% from Nov 6 peak	HALT_INDEFINITE	✅ Yes — tail risk was extreme
Nov 11 FTX bankruptcy	N/A (already halted)	No new fires	✅ Correct

Assessment: SCALE_DOWN at −5% MTD on Nov 8 was appropriate and preceded the worst of the collapse by roughly 6 hours. HALT_INDEFINITE at −15% drawdown correctly prevented trading during a period of extreme counterparty risk and exchange insolvency. The data-gap kill switch would likely have fired on Nov 10 when Binance WebSocket latency spiked to > 60 seconds.

4.3 USDC Depeg (March 10–13 2023)

Event	USDC/USD deviation	BTC peak-to-trough	CB fires	Appropriate?
Mar 10 SVB news	−0.07	−4%	No CB fire	✅ Correct — below threshold
Mar 11 USDC = $0.87	−0.13	−8% intraday	SCALE_DOWN + kill switch DRAWDOWN	✅ Yes
Mar 13 USDC recovery	+0.12 recovery	+8% recovery	N/A (halted)	N/A

Assessment: The USDC event was briefer and shallower than LUNA/FTX. The circuit breaker correctly triggered SCALE_DOWN during the worst intraday move. The 48-hour HALT would have been conservative but reasonable given the uncertainty on Mar 11–12. The auto-recovery on Mar 13 (when USDC restored peg) would have allowed resumption without manual intervention.

Overall conclusion: Across all three events, circuit breaker fires were timely (within 1–2 bars of threshold breach) and appropriate (no false positives during normal volatility). The HALT_INDEFINITE threshold (−15% drawdown) correctly distinguished tail events from manageable corrections.

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5. Phase 11 — Live Paper Deploy (Nautilus + Binance Testnet + Bybit Demo)

5.1 Deploy procedure

# 1. Ensure Postgres schema includes Phase 11 tables
psql "$TESSERA_POSTGRES_DSN" -f infra/postgres/init.sql

# 2. Start the observability stack (Prometheus + Grafana)
docker compose up -d prometheus grafana

# 3. Import Grafana dashboards (auto-provisioned from infra/grafana/dashboards/)
#    dashboards load automatically via the provisioning config in
#    infra/grafana/provisioning/dashboards/default.yaml

# 4. Start the runner
uv run tessera paper start --config configs/live.yaml

# 5. Verify healthcheck is green
curl -s http://localhost:8080/healthz
# Expected: {"status": "ok"}

# 6. Verify Grafana
#    http://localhost:3000 → Tessera — Live Trading
#    heartbeat age < 10 s, kill switch = CLEAR

For production deploy under systemd (Hetzner or similar):

sudo cp infra/hetzner/tessera-paper.service /etc/systemd/system/
sudo systemctl daemon-reload
sudo systemctl enable --now tessera-paper
sudo journalctl -u tessera-paper -f

5.2 Rollback

sudo systemctl stop tessera-paper

git checkout <previous-tag>
uv sync --all-extras

sudo systemctl start tessera-paper

Positions are automatically flattened on stop (SIGTERM triggers the kill switch MANUAL_SIGTERM handler in MLDirectionalStrategy).

5.3 Flatten the book manually

If the runner is unreachable, use CCXT directly:

import ccxt, os

exchange = ccxt.binance({
    "apiKey": os.environ["TESSERA_BINANCE_API_KEY"],
    "secret": os.environ["TESSERA_BINANCE_API_SECRET"],
    "options": {"defaultType": "future"},
    "sandbox": True,   # testnet
})
exchange.load_markets()
exchange.cancel_all_orders()

for pos in exchange.fetch_positions():
    qty = float(pos.get("contracts", 0) or 0)
    if abs(qty) < 1e-6:
        continue
    side = "sell" if qty > 0 else "buy"
    exchange.create_order(pos["symbol"], "market", side, abs(qty),
                          params={"reduceOnly": True})
print("Book flattened.")

5.4 Override kill switch for testing

Restart the runner with elevated thresholds in configs/live.yaml:

kill_switch:
  max_drawdown_pct: 99.0     # effectively disabled
  max_daily_loss_usd: 999999
  enabled: true

Each fresh runner process starts with a clean KillSwitch instance.

5.5 Healthcheck responses

Normal operation:

{"status": "ok"}

Data feed outage (bar feed silent > 60 s):

{
  "status": "degraded",
  "failures": [
    "last_bar_age=91.3s > 60.0s",
    "last_ping_age=42.1s > 30.0s"
  ]
}

Kill switch will have already fired DATA_GAP at 30 s, flattening positions.

Kill switch engaged:

{
  "status": "degraded",
  "failures": ["kill_switch_active: drawdown: drawdown -8.23% > 8.00%"]
}

Postgres down:

{
  "status": "degraded",
  "failures": ["postgres: connection refused"]
}

5.6 Phase 11 acceptance metrics

48-hour run on Binance Testnet (2026-05-16 → 2026-05-18, BTCUSDT + ETHUSDT):

Metric	Value
Total PnL	+$1 240 (+1.24 %)
Max Drawdown	2.1 %
Signal latency p50/p99	28 ms / 91 ms
Order latency p50/p99	45 ms / 190 ms
Restarts	0
Reconciliation mismatches	0

Backtest-to-paper Sharpe gap over the same window: - Backtest Sharpe: 1.87 - Paper Sharpe: 1.31 - Gap: −0.56 (−30 %)

Attribution: - Slippage (modeled 2.5 bps vs actual 4.1 bps on testnet): −0.18 - Signal latency (28 ms avg on 1-min bars): −0.09 - Missed fills (limit not filled → taker fallback): −0.14 - Regime change (momentum → mean-reversion during run period): −0.15