One of the important issues in global financial markets is the creation of a transparent, dynamic structure and the application of minimum rules with maximum efficiency. In order to create the aforementioned structure based on the policies and economic ideology governing the target financial community, various tools are used; among these tools, which are used to control severe price fluctuations in the stock market and reduce the emotional reaction of shareholders, are the permissible fluctuation range and automatic trading stoppage. In fact, in all stock markets in the world, in the case of abnormal fluctuations or force majeure or unforeseen events accompanied by severe shocks, either the fluctuation range limit or the trading stoppage in the form of automatic stoppages are used.
A review of the empirical literature in this report shows that empirical studies critical of price limits are, if not more, no less than studies in their defense; Also, interviews with a number of capital market experts in the country indicate that the stated benefits, such as preventing the overall index from falling, creating more opportunities for decision-making, better market control by market makers, etc., assuming they are realized, are merely short-term and palliative solutions that are not only unable to solve the fundamental and fundamental problems of the capital market in the long term, but can also increase risk and create a platform for the formation of negative expectations among shareholders and generally create a negative view of the capital market, causing capital outflows or the lack of new capital inflows to the stock exchange in the future, leaving deep and inappropriate long-term effects.