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Specialist. On a traditional exchange, a specialist is the professional who matches buy and sell orders.

Expanded Definition

A specialist is assigned to each security traded on the exchange. When a market order has no matching counteroffer, the specialist makes a market by trading against the order if necessary for his own account. In the case of market orders, the specialist buys at the bid price and sells at the ask price. He makes a profit on the bid ask spread.

In the case of securities traded over the counter, market makers provide similar services.

Increasingly bid/ask orders are being matched electronically. The specialist still pays a key role on certain exchanges, especially the New York Stock Exchange.

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