Black Monday

Loading the player...

What is 'Black Monday'

Black Monday refers to October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning of a global stock market decline, making Black Monday one of the most notorious days in recent financial history. By the end of the month, most of the major exchanges had dropped more than 20%.

BREAKING DOWN 'Black Monday'

Interestingly enough, the cause of the massive drop cannot be attributed to any single news event because no major news event was released on the weekend preceding the crash. While there are many theories that attempt to explain why the crash happened, most agree that mass panic caused the crash to escalate.

Since Black Monday, a number of protective mechanisms have been built into the market to prevent panic selling, such as trading curbs and circuit breakers.

RELATED TERMS
  1. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, ...
  2. Stock Market Crash Of 1987

    A rapid and severe downturn in stock prices that occurred in ...
  3. Stock Market Crash Of 1929

    A severe downturn in equity prices that occurred in October of ...
  4. Black Market

    Economic activity that takes place outside government-sanctioned ...
  5. Black Thursday

    The name given to Thursday, Oct. 24, 1929, when the Dow Jones ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest ...
Related Articles
  1. Markets

    What Happened On Black Monday?

    On October 19, 1987, the Dow Jones dropped 508 points, or almost 22% in a single day. That was Black Monday.
  2. Trading

    October: The Month Of Market Crashes?

    In the finance world, October is a month to be feared, but is it justified?
  3. Markets

    Where Does the Term "Black Friday" Come From?

    The term Black Friday can be used in a couple of different contexts; one positive and one negative.
  4. Personal Finance

    9 Worst Items to Buy on Black Friday

    If these items are on your holiday shopping list, consider finding a substitute – or don't expect to get the deal of the year.
  5. Personal Finance

    3 Stores to Avoid This Coming Black Friday

    Learn what stores are best to avoid if you absolutely must participate in the madness known as Black Friday, and identify ways to obtain even better deals.
  6. Markets

    Retailers Rebel Against Black Friday: Bad Move?

    The Black Friday creep may have hit a wall as some stores are shutting their doors on Thanksgiving and even Black Friday to give employees the day off.
  7. Markets

    Why China Is Suspending Market Circuit Breakers

    Chinese regulators have announced that beginning on January 8th, circuit breakers used to halt its stock markets will be suspended in order to "smooth" trading operations.
  8. Personal Finance

    Steps To Getting Out Of Debt

    Learn how to get your bank account back in the black and reach your financial goals.
  9. Markets

    What's a Circuit Breaker?

    A circuit breaker is a measure taken during large stock exchange selloffs to avert panic selling.
  10. Markets

    The Two Biggest Flash Crashes of 2015

    A flash crash occurs when prices plunge in minutes, and then often recover just as quickly. Here are two major flash crashes that occurred in 2015.
RELATED FAQS
  1. What is Black Monday?

    Monday October 19,1987, is known as Black Monday. On that day, stockbrokers in New York, London, Hong Kong, Berlin, Tokyo ... Read Answer >>
  2. What is Black Friday?

    Black Friday is a popular label attached to the Friday following Thanksgiving Day in the US. This day marks the beginning ... Read Answer >>
  3. How is the stock market affected by Thanksgiving and Black Friday?

    See why Thanksgiving and Black Friday sales numbers are considered to be important indicators for stock market activity throughout ... Read Answer >>
  4. How many components are listed on the Dow Jones Industrial Average?

    Learn how many components comprise the Dow Jones Industrial Average and understand the stock index's origins and how it is ... Read Answer >>
  5. What caused Black Monday, the stock market crash of 1987?

    Find out about the factors behind the stock market crash of 1987, also known as Black Monday, when the Dow Jones Industrial ... Read Answer >>
  6. Is the Dow Jones a public company?

    Find out how the Dow Jones Industrial Average tracks the health of the U.S. economy. This fluctuating number indicates the ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center