This study empirically examined the effects of price limits on short-term stock price dynamics using an extensive dataset. We demonstrated that trading activity is related to the thickness of the limit-order book; however, the relationships between the order submission competition involving the thickness of the limit-order book and the bid-ask spread, and between trading activity and the bid-ask spread, are relatively weak. Price limits amplify the Variance Ratio between open-to-open return variance and close-to-close return variance by inducing price continuity around events where limit prices are recorded at market close. Information not fully reflected on the day when the limit price is hit is fully incorporated into the opening price the following day, and stock price dynamics after the opening stabilize for a certain period. Trading activity has a positive relationship with price limits on an ex-post basis but also exhibits a positive relationship on an ex-ante basis. Furthermore, we found that the effects of price limits on short-term stock price dynamics are asymmetric between upper and lower limits.