‘It Frightened Everyone on Wall Street’ – a Memory of Black Monday
— October 19, 2017
By Roy C. Smith
The event was sparked by the usual suspects – an overvalued five-year bull market (the S&P 500 index was up 44% on the year at its peak in August), some near-the-top volatility, and an early morning panic in Hong Kong that passed through Europe and hit NY like a hurricane.
When it did, it forced aggressive margin calls, revealed structural weakness in US trading systems, and sank the then new computer-based, automatic “program trading” and “index arbitrage” schemes.
Read the full article as published by Financial News.
Roy C. Smith is the Kenneth G. Langone Professor of Entrepreneurship and Finance and an Emeritus Professor of Management Practice