[Al Gator]

I was a broker for Blinder Robinson when that occurred.

The main culprit was computer trading. The market took a quick dip for whatever reason, but the institutional traders had just set up their software to protect their portfolios. Software trading was still relatively new and the institutions took a chop and slash attitude toward protecting their portfolios. No one knew that these systems would behave the way they did.

The drop happened so quickly, I couldn't call my clients. All we could do was sit and look at the ADP monitor and marvel at how fast it went down.

The SEC made serious changes to the way software controls the market.

This other stuff about greedy capitalists and the such is just more fart gas from the commie pinkos.

[KellyAdmirer]

Options trading was out of control in those days, too. Everybody was selling puts and praying the market would continue upward. It didn't, and lots and lots of folks had to meet disastrous margin calls, selling into a down market and making it worse.

[FreedomProtector]

"I was a broker for Blinder Robinson when that occurred.
The main culprit was computer trading. The market took a quick dip for whatever reason, but the institutional traders had just set up their software to protect their portfolios. Software trading was still relatively new and the institutions took a chop and slash attitude toward protecting their portfolios."


Thanks for post. It is easy to see how this could happen if sell algorithm was the similar for many institutions.


if( market falls below x day simple moving average )
{
sell
}

if( market falls below y day exponential moving average )
{
sell
}