What does “Specialist” really mean in finance?

Definition:

An exchange specialist is a market maker who facilitates trading on a securities exchange, such as the NYSE. This sort of specialist is granted a monopoly in trading one or more securities on that exchange, in return for pledging to:

  • Maintaining an orderly market in the securities that he or she trades
  • Putting his or her own capital at risk to fill buy and sell orders from the public, in periods when there is an imbalance of orders on one side of the market
  • Minimizing price swings in the securities that he or she trades

The specialist who actually manages the trading may be a representative of a firm that actually supplies the necessary capital.

Secondary Definition of Specialist: The term specialist also refers to someone who assists the sales force in a financial services firm in situations requiring specialized knowledge that the typical sales person may not possess. For example, a brokerage firm may employ specialists in functional areas such as these to assist its financial advisors:

  • Mortgages
  • Small Business Loans
  • Family Office Services
  • High Net Worth Client Services
  • Trusts and Estates
  • Corporate Executive Services, such as Restricted Stock, Concentrated Stock, Insider Stock Holdings and Executive Stock Options
  • Insurance
  • Customized Money Management

Depending on the firm and the situation, these specialists may meet directly with clients, or may deal with the clients’ primary sales contacts (such as financial advisors) strictly behind the scenes. Specialists may be dispersed among sales offices, assigned to sales regions, or located centrally.Also Known As: market maker (regarding the sort of specialist who facilitates trading on a securities exchange)

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