A SECTORAL PERSPECTIVE ON FRONTRUNNERS AND INFORMATION CASCADES: CENTRAL AND ISOLATED CLEARING ANALYSIS USING ISOLATION FOREST

This study analyzes the effects of information asymmetry, strategic trading behaviors, and speculative movements in markets by using the stock prices and clearing data of 448 companies listed on Borsa Istanbul between September 3, 2021, and April 9, 2024. Within the framework of the concepts of information cascade and frontrunner, this study examines the behaviors of central brokers and isolated brokers in the market, evaluating their sectoral impacts and their roles in investment returns. The aim of the study is to understand the effects of speculative trading activities by isolated brokers and the long-term investments of central brokers on market dynamics. Anomaly detection was conducted using the Isolation Forest algorithm, and the impact of these anomalies on market prices was analyzed. Additionally, the relationships between brokerage firms were investigated using network theory, and factors influencing the flow of information in the market were assessed. The findings indicate that both central and isolated brokers tend to pursue high return opportunities in sectors such as technology and energy, while central brokers adopt lower-risk investment strategies in more stable sectors. K-Means clustering analysis was employed to group returns across sectors, revealing that in certain sectors like the RaH sector, isolated brokers achieved significant gains, whereas in others, central brokers were more dominant. These analyses provide important insights into the effects of information asymmetry and speculative trading in financial markets.