Then, during the day, he quotes the current bid and offer prices to brokers. Execute orders for floor brokers. The specialist can execute an order immediately or hold the order and execute it when the stock reaches the specific price requested by the customer. As a dealer, the specialist will buy or sell stock from his own inventory to keep the market liquid or to prevent rapid price changes. Serve as catalysts.
Specialists are the point of contact between brokers with buy and sell orders.
The specialist acts as a catalyst, bringing buyers ad sellers together enabling a transaction to take place that otherwise would not have occurred. If buy orders temporarily outpace sell orders, or conversely if sell orders outpace buy orders, the specialist is required to use his firm's own capital to minimize the imbalance. This is done by buying or selling against the trend of the market until a price is reached at which public supply and demand are once again in balance. Usually public order meets public order without specialist participation, however, specialists do participate in about 10 percent of all shares traded. To ensure that stock trading moves smoothly, with minimal price fluctuation, the specialist will step in against the market trend.