The 1987 market crash associated in part with portfolio insurance and automated selling was Black Monday.
Black Monday occurred on October 19, 1987, when stock markets around the world plunged. The Dow Jones Industrial Average fell 22.6% in a single trading session, the largest one-day percentage decline in its history. The fall was amplified by trading strategies such as portfolio insurance, which generated sell orders as prices dropped.
Other contributing factors included high valuations, rising interest rates, trade tensions, and market structures that allowed selling pressure to spread rapidly. Researchers generally do not identify one single cause that explains every market’s movement.
The crash led regulators and exchanges to introduce or strengthen circuit breakers. These mechanisms can temporarily pause trading during extreme declines, giving market participants time to reassess prices. Black Monday is separate from Black Tuesday in 1929, despite the similar naming convention.