The day in 1987 the stock market dropped 22%!

10 Apr 2026 · 1 min

Watch on YouTube

1:08

In this YouTube monologue, Dan Novaes recounts the events of Black Monday on October 19, 1987, when the Dow Jones Industrial Average plunged 22.6% in a single day—the largest percentage drop in history. He describes the chaotic trading floor atmosphere, the role of emerging program‑trading systems that automatically sold stocks en masse, and how this synchronized computer‑driven selling created a liquidity vacuum that amplified the crash globally. Novaes explains how the rapid, self‑reinforcing sell‑off spread to markets worldwide, and he outlines the regulatory response that followed: the introduction of circuit breakers and automatic trading pauses designed to prevent a repeat of such a speed‑driven market collapse. The video serves as a cautionary narrative about the dangers of market speed and systemic risk.

Chapters

In 1987, the stock market crashed so fast people thought the financial system might collapse. It was called Black Monday, October 19th. No warning, no single cause, just a sudden massive drop. The Dow Jones Industrial Average fell 22.6% in one day. That's still the largest single-day percentage drop in history. Billions vanished in hours. Phones rang nonstop on trading floors. Traders shouted, some froze, others just watched the numbers fall. But here's what made it worse. Computers. At the time, a new system called program trading was being used. When prices dropped, computers automatically sold stocks to limit losses. Sounds safe, but everyone's computers were doing the same thing—selling—at the same time. That triggered more selling, which triggered even more. A chain reaction. Liquidity disappeared. There were moments when no one wanted to buy, only sell, and prices kept falling. Fast. Markets around the world followed. It wasn't just one country. It was global. After that day, major changes were made. New rules, circuit breakers, automatic pauses when markets drop too fast, because Black Monday proved something dangerous. Speed, not just risk, can break an entire system.