Therefore, there is no limit on the price of GEM and science and technology innovation board new shares on the second day after listing, while the price of other common shares on the second day after listing is limited to 10%.
Price fixing is a measure to stabilize the market. In addition, overseas financial markets also have measures such as market disconnection and suspension, speed-limited trading, special quotation system, declared price and trading price limit, adjustment of experts or market intermediaries, and adjustment of trading margin ratio.
There are three measures commonly used in China futures market: price limit, suspension of trading and adjustment of trading margin ratio. Regarding the effect of price limit, academic research has not reached a consistent conclusion. Supporters of the price limit board claim that the price limit board has two properties that can reduce the volatility of futures prices. First, as the name implies, the price limit has a daily limit and a daily limit, and the daily futures price will inevitably fluctuate between the daily limit. Second, the price limit provides a cooling-off period, allowing investors time to re-evaluate futures prices rationally.
Greenwald and Stein( 1988) point out that price truncation triggered by price limit can provide traders with enough time to analyze information, thus reducing the uncertainty of market price and the degree of information asymmetry. Goldman Sachs and Sony Ericsson (1979) suggest that suspension of trading can improve the efficiency of the market under the uncertainty of the market. Other supporters claim that the price limit inhibits overreaction, but does not interfere with trading behavior.
Greenwald and Stein (199 1) proved that when the market is highly uncertain, noise trading dominates the market, and noise traders tend to overreact to new information. Suspending trading can cool unnecessary overreaction and provide traders with enough time to obtain information and re-estimate prices.
Price limit-the price limit comes from the price limit. The term "daily limit board" or "daily limit board" originated from the fact that in the past auctions of foreign exchanges, wooden boards were used to knock on the desktop to indicate a deal or stop trading. When this method is applied to the stock market, when the stock price rises to the upper limit or falls to the lower limit, it is called daily limit or daily limit. But the transaction is not limited to price increase or price decrease, and the transaction continues, but the price remains unchanged. Under normal circumstances, in order to avoid excessive stock volatility and speculation, the relevant departments will set a fluctuation range.