A stocks trading specialist is an employee working on a stock exchange who is responsible for facilitating trade for a particular stock. This specialist will have an inventory detailing what’s available in that particular stock that will allow him or her to post bid and ask prices, execute trades, and limit orders. On a typical stock exchange, there is one specialist present per stock type being sold who works to maintain a market that is both fair and straightforward regarding market transactions.
Responsibilities of the specialist
Specialists have many responsibilities. In general, it is assumed that they will act to benefit the public by assisting in the trade of stock through fulfilling one of the following roles: auctioneer, catalyst, agent, or principal, according to the New York Stock Exchange. As the auctioneer, the specialist will be responsible for serving as the ‘market maker’ by present bids and offers. When functioning as a catalyst, the specialist will maintain records regarding the interests of various buyers and sellers. As an agent, a specialist will place orders for clients. For example, a broker might place an order with a specialist so that he or she can be free for other tasks. Lastly, when performing as the principal the specialist will serve as party to a transaction and work towards maintaing equilibrium in the market in question.
History of the specialist distinction in stock markets
The stocks trading specialist role came into existence around the year 1872. At this time, traders saw the potential benefits of establishing a setup that would allow for continuous trading. Originally, a particular stock could only be traded during a limited period of time. When brokers began specializing in a particular stock, continuous trading become a possibility. The role of the specialist eventually evolved out of the tendency for brokers to specialize.
Specialists at the New York Stock Exchange
A specialist’s on-the-job responsibilities could vary depending on which exchange that specialist works for. At the New York Stock Exchange, there are seven different firms responsible for employing stock specialists. Some past and present NYSE stock specialist firms include Bear Wagner Specialist LLC, Fleet Specialist, Inc, LaBranche & Co, LLC, Performance Specialist Group, LLC, Spear-Leeds & Kellogg Specialist LLC, SIG Specialists, Inc, and Van der Moolen Specialists USA, LLC. Those interested in working as specialists would need to apply to one of these firms to work on the New York Stock Exchange.
Training of a stock specialist
Needless to say, a trading specialist facilitating the market for a particular type of stock needs to understand financial markets and how they work. Ideally, such an individual will have training in finance and economics. The particular job requirements for such a position will typically depend on the company the stock specialist works for.
Related Resource: Professional MBA
Working on a stock market floor can be an interesting and fast-paced job for someone with an interest in finance and investing. The increase in stock types available on markets worldwide is contributing to increasing opportunities in the stocks trading specialist position in many large cities around the world.