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With electronic market making decreasing the role of human intervention at the New York Stock Exchange (NYSE), many long time market maker companies have been contracting their businesses on the exchange.
Operating as designated market makers (DMM), these traders replaced exchange ‘specialists’ which would supervise the ordered trading and liquidity of specific stocks. Similar to specialists, DMMs monitor trading in shares of specific companies and are obligated to price shares according to the national best bid or offer as needed to supply liquidity to shares. Unlike specialists, DMMs aren’t privy to identification of orders before they are executed.
Among the banks ... (read more)