The Big Crash: World economies seemed healthy, but worries were growing about the widening US trade deficit and a rash of investigations into insider trading.
A crisis of confidence hit on October 19, 1987 when jittery investors moved en masse out of stocks into safer bonds. Computers automatically cut their trader's losses by issuing such a large number of sell orders that the system lagged, causing mass panic as investors dumped stocks in the darkness before they fell by more.
That day, the Dow Jones Industrial Average plunged 22.6% - the biggest drop in history - wiping out US$500 billion (S$742 billion) in a single day.
Recovery: Trading was restricted in global markets and liquidity was pumped into the system. A fairly quick recovery followed, with the Dow Jones rebounding to its previous level within a year.
Why it's Important: This was the first instance of computer trading systems contributing to such a huge loss, even though macroeconomic factors were instrumental as well. Also, despite the US stock market losing almost a quater of its value in a single day, no one really knows the exact cause.
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