Both Market Makers (MMs) and Specialists (specs) make markets in stocks, meaning they buy and sell from their own accounts. MMs are part of the National Association of Securities Dealers market (NASD), sometimes called Over The Counter (OTC), and specs work on the New York Stock Exchange (NYSE).
These people serve a similar function but MMs and specs have a number of differences. See the articles in the FAQ about the NASDAQ and the NYSE for a detailed discussion of these differences.
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Contributed-By: Jeffrey Benton