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Market Structure
What Is a Designated Market Maker (DMM)?
Some securities have a dedicated firm responsible for keeping their trading orderly — the designated market maker, a role with real obligations.
NoVo Options Trading · 2026
Educational only, not tax, legal, or financial advice. Rules vary by broker and situation — verify specifics with your broker or a professional.
A designated market maker (DMM) is a firm assigned to maintain fair and orderly trading in a specific security on the NYSE — including running its opening and closing auctions. It’s a specialized version of a market maker.
What a DMM does
Unlike ordinary market makers who compete freely, a DMM has obligations for its assigned securities: quoting at the NBBO a required share of the time, providing liquidity to dampen volatility, and facilitating the opening and closing auctions in an orderly way. It’s the modern descendant of the NYSE floor “specialist.”
Why it matters
DMMs help keep individual securities orderly, especially at the open and close where they set the auction prices. For heavily-traded ETFs and stocks, they’re part of why the auctions run smoothly and why imbalances get resolved into a single price. It’s market-structure plumbing most traders never see but always rely on.
A DMM is a market maker with a job title and obligations — responsible for keeping one security orderly, especially at the auctions that bookend the day.
What it means for a scalper
You won’t interact with a DMM directly, but they’re part of why the auctions and orderly trading exist. It’s deep-structure literacy — useful for understanding how the market’s plumbing works, alongside the market makers whose hedging builds the dealer map.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.