What Causes a Stock Market Crash?
Stock market crashes are triggered by a shock, but fuelled by the conditions before it: stretched
valuations, leverage and extreme greed.
A trigger
shock, bubble, or rate
spike
Fear spreads
everyone heads for the
exit
Forced selling
margin calls cascade
Crash
prices gap down
Crashes are emotion at full speed, which is why fear runs hottest at the lows.
Source: CFGI
Stocks