Do pre-market notifications and stock volatility trigger circuit breakers? Evidence from Turkish post-IPO stocks

Orçun Kaya and Çiydem Çatak

Finance Research Letters, 2025, vol. 81, issue C

Abstract: Understanding how the arrival of pre-market information triggers intraday circuit breakers in post-IPO stocks is central to analyzing market behavior in emerging markets, where information asymmetry and heightened volatility are common. Using data on newly listed stocks from the Turkish stock exchange, this paper examines the drivers of circuit breaker activations in the first year following IPOs. We find that pre-market notifications significantly increase the likelihood of a trading halt, with the magnitude of this effect being moderated by stock-level volatility. Our findings have important policy implications for assessing how pre-market disclosures interact with volatility thresholds to prevent unintended trading halts in fragile market environments.

Keywords: Circuit breakers; Notifications; Post-IPO stocks; Emerging markets (search for similar items in EconPapers)
JEL-codes: C58 G14 G15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007688

DOI: 10.1016/j.frl.2025.107509

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