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This study examines the factors that affect bubble formation in the Turkish stock market, Borsa Istanbul (BIST), which is a major emerging market where high-frequency trading (HFT) is a relatively recent phenomenon. The study uses daily stock price data from the period from March 11 2020 to December 31 2020. The data was obtained from Borsa Istanbul. The study finds that HFT transactions play a significant role in bubble formation. HFT transactions can create excessive volatility and manipulation in the market with their high trading volumes and quick trading capabilities. This can increase the risk of bubble formation. The study highlights the importance of regulation and supervision to mitigate the effects of HFT in financial markets. Regulations aimed at increasing transparency in the market can help investors make more informed decisions.
Mehmet Sinan Çelik (Sat,) studied this question.