what happened on Black Monday Black
Monday or also called the crash of 1987
refers to Monday October 19 1987 when
stock markets around the world crashed
shedding a huge value in a very short
time the crash began in Hong Kong and
spread west to Europe hitting the United
States after other markets had already
sustained significant declines ez
explained Black Monday is perhaps the
most famous trading day in Wall Street
history in one day the companies of the
Dow Jones Industrial Average lost 22
percent of their value or about 500
billion dollars and what is Dow Jones
Industrial Average is a stock market
index that shows how 30 large publicly
owned companies based in the United
States have traded during a standard
trading session in the stock market the
reason for the market crash was that the
supply of stock suddenly far exceeded
the demand for stock and investors
fearing that prices would continue to
fall panicked however the specific
causes of the market crash are
controversial and numerous each factor
that affected the crash was only part of
a larger web of influences for example
a popular explanation for the 1987 crash
was computerized selling dictated by
portfolio insurance hedges an investment
strategy where various financial
instruments such as equities and debts
and derivatives are combined in such a
way that degradation of portfolio value
is protected also a series of corruption
and insider trading investigations
continued to get headlines in 1987 on
Black Monday the heavy cell volume
overwhelmed the New York Stock Exchange
automated order system and many traders
simply gave up trying to execute trades
for a time these events created serious
information gaps and delays which
further inflame the panic selling yit
matters Black Monday was the biggest
one-day loss in the history of the Dow
Jones Industrial Average and was a
reminder of the power of the markets it
became an example of the power of the
lack of investor confidence and the
interrelation of global financial
markets and economic factors for
individual investors Black Monday became
a prime example of the risks of short
term investing and of the temporary
nature of trends
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