The party who serves as a dealer for a few securities on an exchange floor and is obligated to maintain an orderly market for those securities is called a designated market maker.
- An individual who has been chosen by the exchange as the primary market maker for a specific security is known as a designated market maker.
- A DMM is in charge of keeping quotes current and facilitating buy and sell transactions.
- Sometimes, market makers will make markets for hundreds of listed stocks at once.
- Specialists were the previous name for designated market makers on the NYSE.
- Compared to electronic trading, DMMs offer a higher caliber of service.
- Quantities of shares for the securities they are assigned to as designated market makers will be kept in stock.
- The DMM's quotes are comparable to those of floor brokers, and for a portion of the time, the DMM is required to quote at the national best bid or offer.
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