MARKET CRASH

The 1987 Black Monday

Trademaj 9 min read

On October 19, 1987, the Dow Jones fell 22% in a single session — still the largest one-day percentage drop in its history. Program trading and portfolio insurance strategies amplified the selling into a self-reinforcing spiral.

Black Monday

Launch
—
Death / Exploit
Oct 19, 1987
Total Loss
~22% (Dow, single day)

Program trading and portfolio insurance strategies amplified an ordinary sell-off into a self-reinforcing crash, wiping out roughly a fifth of the market's value in a single session.

Lesson

Never underestimate market volatility, or how automated strategies can amplify it.

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