Exchange | Risk Management

The exchange_risk module handles pre-trade validation to ensure that newly submitted orders do not violate exchange-wide safety parameters.

Overview

Before an order is allowed to reach the matching engine, it must pass through the RiskManager. This protects the exchange from "fat-finger" errors, abusive high-frequency behavior, or breach of credit limits.

Key Responsibilities

• Validate order price against the current "Market Band" (e.g., no orders >10% away from mid-price).
• Enforce Maximum Order Quantity (MOQ) limits per instrument.
• Check for Wash Trading (a client matching against themselves).
• Verify sufficient balance/margin before acceptance (placeholder for future implementation).

Architecture

graph TD
    IN(Incoming Command) --> RISK[RiskManager]
    RISK -->|Pass| MATCH(exchange_matching)
    RISK -->|Fail| REJECT(Rejection Event)

Class Diagram

classDiagram
    class RiskManager {
        <<virtual>>
        +preCheck(Order, OrderBook) : bool
        +postTradeUpdate(Trade)
        +postTradeUpdate(vector~Trade~)
        -m_tradeRepo: TradeRepository*
    }
 
    RiskManager --> TradeRepository : Uses

Component Responsibilities

Component	Description
**RiskManager**	The guardian of the partition critical path. Returns a simple boolean Accept/Reject.
**RiskConfig**	A static or dynamically reloadable struct containing the thresholds for different instruments.

Critical Design Conventions

• Fail-Fast: Risk checks are the very first step in the partition worker thread's command loop. Rejections occur before the order occupies any matching memory.
• Deterministic: Risk evaluation must be O(1) in the critical path to avoid introducing latency jitter.