Portfolio insurers sold $6 billion of stocks and index futures on October 19.

Evidence

Detailed analysis by the task force led by Nicholas Brady found that on October 19 portfolio insurers directly sold almost 2 billion in stocks (nearly 10 percent of that day's volume of trading on the New York Stock Exchange). They also sold S&P 500 index futures equivalent to stocks worth 4 billion, more than 40 percent of externally generated trading in those futures (Brady Commission 1988, p. 36). — Donald MacKenzie, An Engine, Not a Camera, 850

Categorization

• XREF: connects to: Portfolio insurance sells more stock as price falls, creating mechanical downward supply. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 867; Widespread crash fears created a self-fulfilling prophecy in October 1987 — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 859

Broader Connections

• Portfolio insurance sells more stock as price falls, creating mechanical downward supply. #expands (0.95) — Donald MacKenzie, An Engine, Not a Camera, 867
• Widespread crash fears created a self-fulfilling prophecy in October 1987 #qualifies (0.80) — Donald MacKenzie, An Engine, Not a Camera, 859