Dynamic and static volatility interruptions: evidence from the Korean stock markets

Kyong Shik Eom, Kyung Yoon Kwon, Sung Chae La, Jong-Ho Park

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We conducted a comprehensive analysis on the sequential introductions of dynamic and static volatility interruptions (VIs) in the Korean stock markets. The Korea Exchange introduced VIs to improve price formation, and to limit risk to investors from brief periods of abnormal volatility for individual stocks. We found that dynamic VI is effective in price stabilization and discovery, while the effect of static VI is limited. The static VI functions similarly to the pre-existing price-limit system; this accounts for its limited incremental benefit.
Original languageEnglish
Article number105
Number of pages19
JournalJournal of Risk and Financial Management
Issue number3
Early online date25 Feb 2022
Publication statusPublished - 25 Feb 2022


  • volatility safeguards
  • volatility interruption
  • call auction
  • price stabilization
  • price discovery


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