Black Monday 1987
Black Monday (19 October 1987) was a one-day ~22% crash in the DJIA, amplified by portfolio insurance — a mechanical selling program that turned a decline into a gap.
Definition
Black Monday 1987 refers to day ~22% crash in the DJIA, amplified by portfolio insurance — a mechanical selling program that turned a decline into a gap. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
It is a named object desks use to frame risk, positioning, or process. When day ~22% crash in the DJIA, amplified by portfolio insurance — a mechanical selling program that turned a decline into a gap shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what black monday 1987 is saying. If day ~22% crash in the DJIA, amplified by portfolio insurance — a mechanical selling program that turned a decline into a gap moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
Keep the definition fixed, then challenge it with cross-checks before sizing. Prefer a short written null hypothesis for Black Monday 1987: what would falsify the current reading in the next window?