Where are specialists commonly found?

Specialists are key participants in the trading process found specifically on stock exchanges. Their primary role is to facilitate trading in particular stocks by acting as market makers, which means they help maintain an orderly market by matching buy and sell orders. Specialists ensure that there is liquidity in the markets for the stocks they manage, and they are responsible for balancing supply and demand, especially during periods of high volatility.

In contrast, over-the-counter markets do not generally involve specialists in the same manner, as trading in these markets is typically facilitated by market makers rather than specialists. Private equity and mutual funds are both different investment vehicles where the role of specialists is not present; these fund structures do not require the same trading mechanisms as stock exchanges do. Understanding where specialists operate helps clarify their importance in maintaining fair and efficient markets on stock exchanges.