A specialist is a person who is a member of a stock exchange, such as the New York Stock Exchange, whose role is to facilitate trading in certain stocks. Specialists must make a market in the stock they trade by displaying their best bid and ask prices to the market during trading hours. They also are required to maintain a "fair and orderly market" in the stocks they trade. They do this by stepping in with their own capital to help reduce market volatility when there are not sufficient buyers or sellers. The rules of the exchange prohibit specialists from trading ahead of investors who have placed orders to buy or sell a security at the same price. While the number of stocks a specialist trades depends on how active the stock trades, most specialists are responsible for trading five to ten stocks.
More information about what specialists do and their responsibilities is available on the website of the New York Stock Exchange -- go to its Glossary and click on "Specialist."