In a securities market
, a specialist in a security is a market maker
that has taken on the responsibility of keeping the order book
for the security, and always making a market (quoting both bid and ask prices on demand.)
Keeping the order book gives the specialist more information than the other market participants, and thus gives him an advantage. From the point of view of the other participants, the advantage of having a specialist in place is that there is always guaranteed liquidity.