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Black Monday (also known as Black Tuesday in some parts of the world due to time zone differences) was the global, severe and largely unexpected [1] stock market crash on Monday, October 19, 1987. Worldwide losses were estimated at US$1.71 trillion. [2]
- Program Trading
- Black Monday Trading Chart
- Portfolio Insurance
- Ominous Signs Before The Crash
- The Bottom Line
The week before the 1987 crash, having come off a very bad week just before (with the S&P down more than 9%), sell orders piled upon sell orders as the new week began. From the open on the following Monday, Oct. 19, 1987, the S&P 500 and Dow Jones Industrial Average (DJIA) both shed in excess of 20% of their value. There had been talk of the U.S. e...
Greenspan hurried to slash interest rates and called upon banks to flood the system with liquidity. He had expected a drop in the value of the dollar due to an international tiff with the other G-7nations over the dollar's value, but the seemingly worldwide financial meltdown came as an unpleasant surprise that Monday. Exchanges also were busy tryi...
One automated trading strategy that appears to have been at the center of exacerbating the Black Monday crash was portfolio insurance. The strategy is intended to hedge a portfolio of stocks against market risk by short-selling stock index futures. This technique, developed by Mark Rubinstein and Hayne Leland in 1976, was intended to limit the loss...
There were some warning signs of excesses that were similar to excesses at previous inflection points. Economic growth had slowed whileinflation was rearing its head. The strong dollar was putting pressure on U.S. exports. The stock market and economy were diverging for the first time in the bull market, and, as a result, valuations climbed to exce...
Although program trading contributed greatly to the severity of the 1987 crash (ironically, in its intention to protect every single portfolio from risk, it became the largest single source of market risk), the exact catalyst is still unknown and possibly forever unknowable. With complex interactions between international currencies and markets, hi...
4 days ago · Black Monday, global stock market crash that occurred on October 19, 1987. There have been several Black Mondays in history that are connected to stock market collapses, but what is arguably the worst of them arrived in 1987.
Oct 19, 2017 · The crash on 19 October 1987 remains the biggest one-day fall the FTSE 100 has suffered and is ingrained in the memories of many.
Nov 22, 2013 · Stock markets quickly recovered a majority of their Black Monday losses. In just two trading sessions, the DJIA gained back 288 points, or 57 percent, of the total Black Monday downturn. Less than two years later, US stock markets surpassed their pre-crash highs.
Jul 31, 2024 · Black Monday refers to the stock market crash that occurred on October 19, 1987, when the DJIA lost 22.6% in a single day, triggering a global stock market decline.
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Oct 19, 2017 · On Black Monday 30 years ago investors were stunned by a global stock markets crash. What's its legacy?
