In finance, Black Monday refers to Monday, October 19, 1987, when stock markets around the world crashed, sending prices plummeting within a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%).

The 1987 crash marked the end of a five-year ‘bull’ market wherein the Dow rose from 776 points in August 1982 to a high of 2,722.42 points in August 1987. However, unlike what happened during the Wall Street Crash of 1929, the market rallied immediately after the crash, posting a record one-day gain of 102.27 the very next day and 186.64 points on Thursday October 22. It took only two years for the Dow to recover completely; by September of 1989, the market had regained all of the value it had lost in the ’87 crash.

Although the 1987 crash was the second largest in history, it was one of many recorded market crashes to have taken place around the world since the 17^th century.

Tulip Mania

The Tulip mania in 1637 occurred following a period where tulips and tulip bulbs were bought and sold in a rather frantic manner. This trade deteriorated into speculation and the market crashed suddenly several months later with prices plummeting and many investors being left penniless.

The Mississippi Bubble of 1720 saw Englishman John Law create a stock company that was tied to the speculation of the American territories owned by France. Shares subsequently crashed. This was immediately followed by the South Sea Bubble of 1720 when the English managed to devise their first modern market crash centered on trading in a company with absolutely no prospects.

Black Friday

The Black Friday 1869 was a genuine American market crash, sparked when financiers James Fisk and Jay Gould sought to exploit political connections to corner the gold market. Gold’s peak price of $162 an ounce wasn’t exceeded for more than 100 years.

The 1882 Paris Bourse crash was triggered by the failure of l’Union Generale. This resulted in almost a quarter of the brokerage houses on the bourse being threatened with extinction until a loan from the Bank of France stabilized the market.

Then there was the Panic of 1907, started by a failed attempt to corner stock in United Copper in October 1907. The crisis ultimately lead to creation of the Federal Reserve System.

As a result of the Crash of 1929, the most well-known market crash, highly leveraged investors lost all their savings. This crash ushered in the Great Depression.

On October 27, 1997, a mini-crash took place in the Asian markets and Hong Kong’s Hang Seng index slumped 6% triggering global slumps, with the Dow ending the day early, down 554.26 points.

And on September 29^th, 2008, the Dow Jones Industrial Average had its biggest one-day point drop ever after Congress failed to pass the TARP bailout bill. The index slide of more than 700 points ushered in a period of intense instability in the wake of the Lehman Bros. bankruptcy.

Since that time, there have been many drastic drops in the market but nothing that would constitute a market crash.

Cina Coren is a contributing editor at DailyForex. She writes freelance for many publications and tries to find the humor in life’s challenges.