Self-Help

DEFINITION of 'Self-Help'

A self-help alert is a notification, issued by a trading exchange such as the NYSE or NASDAQ, that a glitch has occurred on one of the exchanges and that the exchange should be temporarily bypassed to permit the regular flow of orders.

A self-help order, for example, could be issued by the NASDAQ if the NYSE had experienced a problem and needed to halt trading on any or all of its stocks. The alert would be canceled when the NYSE resolved its problems.

BREAKING DOWN 'Self-Help'

A variety of issues may lead to a self-help alert being issued. Most commonly, these alerts center on technical issues that prevent a trading exchange from operating correctly. The self-help alerts allow other trading entities to bypass the system that has been identified in the alert, and ensures that general trading can continue while the issues affecting the exchange are being resolved.

Example of the Self-Help Alert Process

Should Trading Exchange X experience an issue that prevents transactions from being properly completed, Trading Exchange Y can institute a self-help alert. As part of the process, Trading Exchange Y can now elect to use the self-help exception. The self-help exception allows them, and any other impacted entity, to continue operating by bypassing the known issue. This means that any other entity affected by the issue does not have to invoke its own self-help alert. Instead, the original alert issued from Trading Exchange Y applies to all other entities of the same nature. This allows the exception option to be available to any other impacted trading exchange. This workaround remains in place until Trading Exchange X is able to restore normal function, at which point the alert will be canceled and trading can continue as normal.

Self-Help Alerts and Automated Trading

Automated trading is a computerized system that conducts trades through the use of its software. It allows trading without the need for a person, such as a broker, to initiate and complete the transaction, also known as an order. Due to the nature of the automation, all automated trading entities should have standard policies and procedures in place to manage the impact of a declared self-help alert. Often, a self-help alert necessitates intervention by an appropriate person or employee of the automated trading service. As alerts can change quickly, they must be monitored in real-time so that any software algorithms can be adjusted to allow trading to continue.