Series 62

Trading Securities - The Role Of The Specialist / DMM

The specialist is an independent exchange member who has been assigned a stock or group of stocks for which they are the designated market maker (DMM). They are responsible for:

  • Maintaining a fair and orderly market for the securities
  • Buying for their own account in the absence of public buy orders
  • Selling from their own account in the absence of public sell orders
  • Acting as an agent by executing public orders left with them
A large amount of capital is required in order to fulfill the requirements of a specialist / DMM. As a result most specialists/ DMMs are employees of specialist firms. While the specialist is not required to participate in every transaction, every transaction for that security that is executed on the exchange must take place in front of the specialist. The specialist may act as either an agent or as a principal if they play a role in the transaction.



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