The effect of Trading Halt Time on Returns, Trading Volume and the Process of Discovering Stock Price in the Tehran Stock Exchange
Journal Title: International Research Journal of Applied and Basic Sciences - Year 2013, Vol 7, Issue 12
Abstract
Halt of trading of a publicly traded company is practiced prior to release of significant information about companies to provide investors an opportunity to analyze the news. When a publicly traded company faces considerable changes that can potentially influence its stock value, market authorities provide investors with such mechanisms to take appropriately action to the changes and avoid a turmoil market. Since nearly all conducted research dealt with the effects of trading halt rather than its duration, this research is aimed to investigate possible correlation between the duration of the trading symbol’s halt with its returns, trading volume, and the process of discovering stock’s price. To do so, halts were divided into four groups based on their duration then the effects of time period on research variables were studied. Data was gathered from companies traded in Tehran Stock Exchange during 2007-2011. Our hypotheses were examined using variance analysis (ANOVA), Duncan Test and Regression. The results reveal a significant correlation between halt duration and the variables under study. We found that the longer the halt time is, the higher percentage of change can occur on the symbol’s opening day. Also trading volume increases while stock’s returns decreased, for shorter halt duration.
Authors and Affiliations
Mehdi Ahmadi| Accounting Department, Islamic Azad University, Borujerd Branch, Borujerd, Iran, email: amehdi364@gmail.com, Mohammad Janani| Accounting Department, Islamic Azad University, Borujerd Branch, Borujerd, Iran, Ali Aqha-Mohammadi| Accounting Department, Islamic Azad University, Borujerd Branch, Borujerd, Iran
Keywords
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