What Is a Designated Market Maker (DMM)?

A designated market maker (DMM) is a market maker who is in charge of keeping markets fair and orderly for a certain group of listed companies. The designated market maker, formerly known as specialists, is the official market maker for a group of tickers and will take the opposite side of transactions when buying and selling imbalances develop in order to preserve liquidity in these allocated stocks. The DMM also acts as a point of contact for the listed business on the trading floor, providing information such as general market circumstances, traders’ moods, and who is trading the stock.