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Kill-Switch Fire Drill — 2026-04-12

GAP-003 Closure

Drill Summary

Item Result
Date 2026-04-12
Operator Agent DR (automated)
Test file tests/test_killswitch_drill.py
Tests run 19
Tests passed 19
Tests failed 0
Duration 0.87s

What Was Tested

  1. Property-based state machine invariants (Hypothesis, 200+ examples)
  2. Escalation is monotonic (never goes down automatically)
  3. Daily loss thresholds map correctly to tiers

  4. Throttle factor is always consistent with current tier

  5. Tier restriction enforcement

  6. NORMAL: all signals allowed
  7. WARN: trading continues, alert logged
  8. THROTTLE: position sizes halved (factor=0.5)
  9. NO_NEW: new positions blocked, reducing allowed

  10. FLATTEN: ALL trades blocked

  11. FLATTEN triggers

  12. Max drawdown breach escalates directly to FLATTEN

  13. Event recorded in kill history with timestamp and reason

  14. De-escalation controls

  15. Improving PnL does NOT de-escalate automatically
  16. Reset requires named approver (audit trail)

  17. Two-person reset flow verified (combined approver string)

  18. State persistence (mock Redis)

  19. Kill tier survives simulated daemon restart
  20. FLATTEN state preserved

  21. Full history preserved across restart

  22. Full escalation ladder

  23. Complete walk-through: NORMAL -> WARN -> THROTTLE -> NO_NEW -> FLATTEN

Findings

  • All 5 tiers enforce restrictions correctly.
  • Automatic escalation works as designed. De-escalation is manual-only.
  • The two-person reset is currently implemented as a single reset_kill_switch(approver="name1+name2") call. Production should validate two distinct API calls from two different sessions.
  • State persistence requires external infrastructure (Redis). The serialization/deserialization pattern works correctly.

Gaps Remaining

  • Production enhancement: reset_kill_switch should reject single-person resets at FLATTEN tier (requires code change, not a test issue).
  • Integration: No live Redis test. Mock Redis proves the pattern works.

Verdict

GAP-003: CLOSED. The kill-switch state machine is verified to work correctly under all tested conditions.