Black Monday is the name commonly given to the global, sudden, severe, and largely unexpected stock market crash on Monday, October 19, 1987. This article will discuss, "Stock Market Crash 1987: What exactly happened on Black Monday?" Let's get started.
What exactly happened on Black Monday?
Most market participants couldn't believe what they were seeing, perhaps all across the world. There was no apparent cause for the free collapse in stock values. Everyone was attempting to minimize their own losses in whatever way they could as the day went on and Fear began to set in. Several traders and financial institutions made rash decisions as a result of a severe case of herd behavior, which only contributed to the general decline in stock prices. Following Black Monday, economist and Nobel Prize winner Robert Shiller surveyed market participants. Several acknowledged that during the crash, the majority of their responses were based on price changes rather than any specific news.
As trading networks were increasingly becoming overwhelmed with selling orders, the trade order updates became slow and unreliable, pushing people to act even less rationally. When all was said and done, Dow Jones had its worst day in history with a 22.6% drop, the S&P 500 lost almost 20% of its value and 29% in the futures market, while the major world markets declined by between 20% and 40%. The hardest hit was Hong Kong, Australia, and Singapore. In total, worldwide losses were estimated at $1.7 trillion US dollars.
Stock Market Crash 1987: What exactly happened on Black Monday? - Hopefully, this article can help you to get some knowledge.
