market crash of 1987

Discussion in 'Trading' started by NYSEtrader123, Jan 21, 2006.

  1. Does anybody know where to find an intraday chart for the days during the market crash of 1987.

    Also, if anybody was a trader then and could share their experiences that would be great.

    Thanks in advance for your response.
  2. Pabst


    After climbing in almost parabolic fashion over the summer the market was soft for a few weeks with a couple of in your face one or two day rallies (like Thursday's). Bonds had been breaking since spring and were trading in the high 70's (albeit with the old 8% futures coupon). The dollar was also on several year lows. October expiration was about a 6% drop and many traders thought Friday seemed to be the blow off bottom. The week prior to the crash (options expiration) there were numerous put plays for 200-1. I knew a few CBOE guys who's positions were delta neutral ATM but with short deltas kicking in at dramatically lower prices (backspreads and the like) who made from 1-5 million on relatively small positions. A Hong Kong trader was short puts and he blew up First Options costing them almost 50 million.

    Evidently (I was trading in the bond pit at the time) many Oct index put sellers rolled their positions out into Nov and many equity put sellers were swamped with unwanted stock on Friday. On monday I believe SPZ87 opened down about two points and just eroded from there. Bonds bounced late in the day and overnight bond futures rallied ten handles.
  3. That is some really good stuff. I cant even imagine the amount of wealth that was lost and made within a few days. Were you saying that the crash came near option expiration day? I was watching some of the options on this friday's expiration day and there were some pretty impressive moves. The GOOG 420 spot puts moved from 15 cents in the morning to over $20 by the close. I can't even imagine what some of the well out of the money spot puts must have done during the 87 crash.

    More stories would be great. I also would like to find an intraday chart for the markets during the crash.

  4. I wanted to try and revive this forum. I would love to hear some more trading stories of that week in 87'.
  5. I was a stockbroker then with a small conservative client base
    I had a couple of stock trading millionaire clients and when I told them to ease off and take some money off the table they ignored me. after the crash for months I could not do any business so I left and became a futures broker, figuring that futures guys would be a little more acustomed to swings and drawdowns. After a while I realized that people are stupid sheep and will not listen to you (well at least most of them wont). Best to trade your own money but at least I got my experience partially in cliens expense.....
  6. I was a trader in the SPX options pit on the CBOE during that fateful week. A lesser known story about that week took place on Thursday 10/22. A large sell order was sent to the sp 500 DESK at the MERC which wound up being duped. As a result the futures opened down about 60 points. All our options which were trading at about 100 vol to begin with, opened at appropriate levels with the puts going up astronomically. As the traders in our pit were sending sell orders to the MERC to hedge their long deltas from our opening, the futures rallied sharply and many of the traders received fills 40, 50 or 60 points better than they expected. In all my years as an option trader I had never witnessed as much money being made in such a short time.
  7. Amnesiac


    Not intraday, but still interesting:



  8. ========================
    Helpful question & answers;
    wasn't actively trading then, but have realized for some time one my favorite time frames,/medium could be real risky in that type of sharp quick daily move.

    As for ''trading .. of that week in 87;;
    both good news & bad news for swing /position traders,
    some NYSE stocks weekly AUG-SEPT -OCT charts gave crystal clear sell signals, some didn't.

    And instead of wrongly doing a blame-game others, like some did; on
    your question is a good reminder for '' time frame diversification....''
  9. weekly charts on the S and P had turned bearish --I had shorted the market in late August and really caught one.

  10. How much did u make?
    #10     Feb 11, 2006