specialist

Specialist

A member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid and ask prices, manages limit orders and executes trades. They are also responsible to trade out of their own inventory to manage large movements. If there is a large shift in demand on the buy or sell side, the specialist will step in and sell out of their inventory to meet the demand until the gap has been narrowed.

Notes:

There is usually one specialist per stock who stands ready to step in and buy or sell as many shares as needed to ensure a fair and orderly market in that security.

See also: Ask, Bid, Limit Order, Market Maker, Member, Member Firm, New York Stock Exchange - NYSE

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Specialist

On an exchange, the member firm that is designated as the market maker (or dealer for a listed common stock). Member of a stock exchange who maintains a "fair and orderly market" in one or more securities. Only one specialist can be designated for a given stock, but dealers may be specialists for several stocks. In contrast, there can be multiple market makers in the OTC market. Major functions include executing limit orders on behalf of other exchange members for a portion of the floor broker's commission, and buying or selling for the specialist's own account to counteract temporary imbalances in supply and demand and thus prevent wide swings in stock prices.

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specialist

A member of a securities exchange who is a market maker in one or more securities listed on the exchange. The specialist is the person on the exchange floor to whom other members go when they wish to transact or leave an order. Specialists are assigned securities by the exchange and are expected to maintain a fair and orderly market in them. Also called assigned dealer. See also book, Rule 104.