Strategy Runbooks and On-Call Documentation

A runbook is the document that lets someone other than the strategy's author keep it running safely overnight or on a weekend. It typically states what the strategy trades, what its normal position size and P&L ranges look like on an ordinary day, which upstream data feeds and services it depends on, and, most importantly, a numbered list of "if X happens, do Y" instructions for the failure modes the author has already thought about: a feed going stale, a position limit breach, an unexplained P&L swing, or an exchange connectivity drop.

For example, a runbook entry might read: "If the strategy's overnight position exceeds $2m notional and no corresponding signal fired in the last log entry, kill the strategy via the emergency stop script and page the strategy owner, do not attempt to manually flatten first." Without that entry, an on-call engineer unfamiliar with the strategy's internals has to guess whether an unusual position is expected behavior or a bug, under time pressure and often at a bad hour.

Good runbooks are kept next to the code, updated whenever the strategy's logic changes, and tested by having someone other than the author actually follow them during a drill, a runbook nobody but its author can execute is not really a runbook.