From 699a77a7514820ca3fd9dc2ca65e433364c02b30 Mon Sep 17 00:00:00 2001
From: Elias Van Ootegem <elias@vega.xyz>
Date: Tue, 27 Aug 2024 09:48:54 +0100
Subject: [PATCH] fix: update position status on trade for parties previously
 marked as closed out

Signed-off-by: Elias Van Ootegem <elias@vega.xyz>
---
 CHANGELOG.md                       |  1 +
 datanode/entities/position.go      |  4 ++++
 datanode/entities/position_test.go | 25 ++++++++++++++++++++++++-
 3 files changed, 29 insertions(+), 1 deletion(-)

diff --git a/CHANGELOG.md b/CHANGELOG.md
index a1af7a5dc2b..e67f55473c4 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -48,6 +48,7 @@
 - [11607](https://github.com/vegaprotocol/vega/issues/11607) - Wire rank lottery distribution to team reward payout.
 - [959](https://github.com/vegaprotocol/core-test-coverage/issues/959) - Include `ELS` for `AMM` sub keys to the parent key `ELS`.
 - [11592](https://github.com/vegaprotocol/vega/issues/11592) - Fix the order of calls at end of epoch between rebate engine and market tracker.
+- [10907](https://github.com/vegaprotocol/vega/issues/10907) - Fix position API distressed status not getting updated once the party has been closed out.
 
 
 ## 0.77.5
diff --git a/datanode/entities/position.go b/datanode/entities/position.go
index 532aa705fa0..265c6bf13cc 100644
--- a/datanode/entities/position.go
+++ b/datanode/entities/position.go
@@ -144,6 +144,10 @@ func (p *Position) UpdateWithTrade(trade vega.Trade, seller bool, pf num.Decimal
 	p.pendingMTM(assetPrice, pf)
 	if trade.Type == types.TradeTypeNetworkCloseOutBad {
 		p.updateWithBadTrade(trade, seller, pf)
+	} else if p.DistressedStatus == PositionStatusClosedOut {
+		// Not a closeout trade, but the position is currently still marked as distressed.
+		// This indicates the party was closed out previously, but has topped up and opened a new position.
+		p.DistressedStatus = PositionStatusUnspecified
 	}
 }
 
diff --git a/datanode/entities/position_test.go b/datanode/entities/position_test.go
index ffa65479f2f..07f7a553505 100644
--- a/datanode/entities/position_test.go
+++ b/datanode/entities/position_test.go
@@ -85,6 +85,7 @@ func TestDistressedPartyUpdate(t *testing.T) {
 	market := "market-id"
 	party := "party1"
 	position := entities.NewEmptyPosition(entities.MarketID(market), entities.PartyID(party))
+	pf := num.DecimalFromFloat(1)
 
 	ps := events.NewSettlePositionEvent(ctx, party, market, num.NewUint(1000), []events.TradeSettlement{
 		tradeStub{
@@ -95,7 +96,7 @@ func TestDistressedPartyUpdate(t *testing.T) {
 			size:  3,
 			price: num.NewUint(1200),
 		},
-	}, 1, num.DecimalFromFloat(1))
+	}, 1, pf)
 	position.UpdateWithPositionSettlement(ps)
 	pp := position.ToProto()
 	assert.Equal(t, "0", pp.RealisedPnl)
@@ -111,9 +112,31 @@ func TestDistressedPartyUpdate(t *testing.T) {
 	// now assume this party is distressed, and we've taken all their funds
 	sde := events.NewSettleDistressed(ctx, party, market, num.UintZero(), num.NewUint(100), 1)
 	position.UpdateWithSettleDistressed(sde)
+	// ensure the position is flagged as distressed.
+	assert.Equal(t, entities.PositionStatusClosedOut, position.DistressedStatus)
 	pp = position.ToProto()
 	assert.Equal(t, "0", pp.UnrealisedPnl)
 	assert.Equal(t, "-1000", pp.RealisedPnl)
+
+	// now submit process a closeout trade event
+	position.UpdateWithTrade(vega.Trade{
+		Size:       5,
+		Price:      "1200",
+		AssetPrice: "1200",
+		Type:       vega.Trade_TYPE_NETWORK_CLOSE_OUT_BAD,
+	}, true, pf)
+	// now ensure the position status still is what we expect it to be
+	assert.Equal(t, entities.PositionStatusClosedOut, position.DistressedStatus)
+
+	// next, assume the party has topped up, and traded again.
+	position.UpdateWithTrade(vega.Trade{
+		Size:       1,
+		Price:      "1200",
+		AssetPrice: "1200",
+		Type:       vega.Trade_TYPE_DEFAULT,
+	}, true, pf)
+	// now the distressed status ought to be cleared.
+	assert.Equal(t, entities.PositionStatusUnspecified, position.DistressedStatus)
 }
 
 func TestMultipleTradesAndLossSocializationPartyWithOpenVolume(t *testing.T) {