for error and must constantly monitor market conditions to avoid offering other investors advantageous terms. There are two reasons why large bid-asked spreads are not viable options for the spe- cialist. First, one source of the specialists income is derived from frequent trading at the bid and asked prices, with the spread as the trading profit. A too-large spread would make the specialists quotes noncompetitive with the limit orders placed by other traders. If the specialists bid and asked quotes are consistently worse than those of public traders, it will not participate in any trades and will lose the ability to profit from the bid-asked spread. Another reason specialists cannot use large bid-ask spreads to protect their interests is that they are obligated to provide price continuity to the market. To illustrate the principle of price continuity, suppose that the highest limit-buy order for a stock is $30 while the lower limit-sell order is at $32. When a market buy order comes in, it is matched to the best limit-sell at $32. A market sell order would be matched to the best     3 Actually, the specialists published price quotes are valid only for a given number of shares. If a buy or sell order is placed for more shares than the quotation size, the specialist has the right to revise the quote. I. Introduction 3. How Securities Are Traded The McGraw−Hill Companies, 2001           CHAPTER 3 How Securities Are Traded 79     Table 3.6 Block Transactions on the New York Stock Exchange   Shares Percentage of Average Number of Block Year (millions) Reported Volume Transactions per Day   1965 48 3.1% 9 1970 451 15.4 68 1975 779 16.6 136 1980 3,311 29.2 528 1985 14,222 51.7