The 1980s U.S. market crash associated with failures in stock-index futures arbitrage was called Black Monday. On October 19, 1987, the Dow Jones Industrial Average lost 22.6%, its largest one-day percentage decline.
Researchers and regulators examined the relationship between stock-index futures, program trading, and portfolio insurance. Selling pressure in futures markets could be transmitted to cash equity markets, while falling prices generated additional sell orders in some automated strategies.
The precise causes remain debated, and no single mechanism fully explains the global sell-off. Market structure, valuation concerns, investor psychology, and international monetary tensions also mattered.
This event is often confused with the 1987 date itself or with later crashes called Black Monday. The answer is the established nickname, while the arbitrage mechanism is a contributing market-structure issue rather than the crash's official name.