At the time of the crash $60 billion or so of equities were insured by this technique and implemented largely by computers. When the market fell 4 percent on Friday the insurance programs placed orders, to be executed at Monday’s opening, to sell stock and buy Treasury bills. When trading began on Monday, these sales drove stock prices down further, triggering more selling from portfolio insurance programs.
Electronic trading curbs were put in place after this incident? Can’t remember.
