when a limit order for a security is entered it is kept on record by the security specialist as buy and sell limit orders for the security are given the specialist keeps a record of all of these orders in the order book the specialist executes the orders at or better than the given limit price when the market moves to the pre specified price 
understanding a limit order bookthe specialist running the limit order book has the responsibility to guarantee that the top priority order is executed before other orders in the book and before other orders at an equal or worse price held or submitted by other traders on the floor such as floor brokers and market makers the specialist earns a profit off of the spread between the difference in prices between the bid and ask orders on their book as they execute the orders with the advancements in trading system technologies the process has shifted from a manual process to one that is largely automated tracking limit ordersin 2000 the securities and exchange commission sec began to create a centralized limit order book that keeps track of limit orders on exchanges electronically 1 this electronic order tracking system automatically matches for the execution of the best possible pair of orders in the system the best pair is made up of the highest bid and the lowest ask orders the bid is the price the specialist or exchange will sell a security or the price at which an investor can buy the security the ask or offer is the price at which the specialist or exchange will buy a security or the price at which the investor can sell the security 