The Stock Exchange of Thailand (SET) and the Association of Securities Companies (Asco) plan to propose measures aimed at cooling down trading in speculative red-hot stocks next Wednesday.
The measures are unlikely to affect overall investment sentiment on the bourse, the SET said.
The stock exchange has sought measures to curb stock manipulation and speculation in the market, which have been on the rise in recent months.
Trading in speculative stocks doubled to 20% in recent months, while margin loan trading has risen to 60 billion baht from 40 billion.
"The current price-to-earnings ratio of the stock market is 16.28 times, with prices of big-cap stocks rising," said SET executive vice-president SET Pakorn Peetathawatchai. "However, prices of small-cap stocks still hold upward gains, and that's why an increasing number of investors have turned to them."
He said investment in stocks outside the SET 100 rose to 45% of overall total trading volume last month from 44% in September.
Trading volume of these stocks stood at only 24% last year.
Mr Pakorn said bourses in other regional countries such as Malaysia and the Philippines had experienced similar situations of investors jumping into medium- and small-cap stocks.
"The reason for this is similar — the prices of most blue-chip stocks have risen. That's why investors turn to smaller stocks," he said.
The SET plans to propose measures aimed at discouraging trading in speculative stocks at its board meeting on Wednesday, some of which will be launched immediately.
The number of stocks on the cash balance list jumped to 163 in the first 10 months of this year, the same number for all of last year.
The stocks on the trading alert list surged to 98 from 64, SET data show.
Asco recently asked members to trim the credit lines of customers trading largely in speculative stocks by 20-50% as part of efforts to cool down stock speculation.