Abstract
This paper aims to search the high volatility of stock prices in stock market crises produced by adverse information, throughout investigating the links between stock price volatility and the institutional features of the major stock exchanges as exist in practice. The study finds that the causes of stock market crises reside in First, the noise trading and overreaction of stock traders. Second the increasing linkage among the international stock markets. Third, the effect of the option markets. Fourth some of the present institutional features of the stock market structure. The paper suggests reforms to curb the possible causes of stock market instability. The reforms relate to regulations concerning bearer share certificate, outside stock trading, controlling of high price fluctuations, price quotations, and stock dealing methods and cash settlement systems. In addition, the paper discussed the holding own share's model as a new financial instrument to support the stock market price in case of market crises.
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