THE 1987 STOCK
The term ‘Black Monday’ was used in the financial wor-
ld to describe the infamous Wall Street stock market
crash that happened on the 19th of October 1987.
2 Thibaut De Roux
On this day, the Dow Jones Industrial
Average fell by approximately $500
billion, or 22% of the overall value of
the companies in the index. Due to
time zone differences, this crash is
known as Black Tuesday in Australia
and New Zealand.
$500billion or 22%
3Thibaut De Roux
Causes of the Crash
Stock Market Crash of 1929
This spectacular market crash occurred because investors panicked.
The demand for stock was suddenly far lower than the supply, re-
sulting in investors selling off stock at lower prices in fear that these
prices would only drop further if they held onto their assets. Pro-
gram trading was also to blame, as automated trading mechanisms
were programmed to place stop-loss orders after certain thresholds
were crossed in the stock market.
Black Monday and Black Tuesday can also refer to another stock mar-
ket crash which occurred in 1929, on the 28th and 29th of October.
Black Monday is an extreme example of market volatility and how
investor confidence affects this.
You can learn
more about the
volatility and risk by
visiting the blog of
Thibaut De Roux.